W. R. Grace & Co.
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40 North Management LLC
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7500 Grace Drive
Columbia, Maryland 21044
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9 West 57th Street, 47th Floor
New York, New York 10019
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Phone: (410) 531-4000
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Phone: (212) 821-1600
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Attn: Cherée Johnson
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Attn: Jason Pollack
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Wachtell, Lipton, Rosen & Katz
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Sullivan & Cromwell LLP
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51 West 52nd Street
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125 Broad Street
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New York, NY 10019
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New York, NY 10004
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(212) 403-1000
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(212) 558-4000
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Attn: Andrew R. Brownstein, Gregory E. Ostling & Mark A. Stagliano
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Attn: Matthew G. Hurd & Scott B. Crofton
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Maximum aggregate value of transaction*
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$4,682,571,165
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Amount of filing fee**
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$510,869
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* |
Solely for purposes of calculating the filing fee, the underlying value of the transaction was calculated based upon the sum of: (a) the product of 66,269,318 shares of Grace common stock and the per share merger consideration of $70.00;
(b) the product of (i) 680,261 shares of Grace common stock issuable upon exercise of options with an exercise price below the per share merger consideration of $70.00 and (ii) the difference between $70.00 and the weighted average exercise
price of such options of $61.63; (c) the product of 273,432 shares of Grace common stock underlying restricted stock units that are not subject to performance vesting and the per share merger consideration of $70.00; and (d) the product of
269,784 shares of Grace common stock underlying performance-based restricted stock units and the per share merger consideration of $70.00.
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Amount Previously Paid:
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$510,869
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Filing Party:
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W. R. Grace & Co.
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Form or Registration No.:
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Preliminary Proxy Statement on Schedule 14A and Amendment No. 1
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Date Filed:
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May 24, 2021 and June 21, 2021
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Dated as of July 6, 2021.
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W. R. GRACE & CO.
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By:
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/s/ Cherée Johnson | ||
Name:
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Cherée Johnson
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Title:
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Senior Vice President, General Counsel and Secretary
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GIBRALTAR MERGER SUB INC.
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By:
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/s/ David J. Millstone | ||
Name:
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David J. Millstone
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Title:
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Co-Executive Chairman, Chief Executive Officer & President
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GIBRALTAR ACQUISITION HOLDINGS LLC
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By:
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/s/ David J. Millstone | ||
Name:
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David J. Millstone
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Title:
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Co-Executive Chairman, Chief Executive Officer & President
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GIBRALTAR MIDCO HOLDINGS LLC
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By:
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/s/ David J. Millstone | ||
Name:
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David J. Millstone
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Title:
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Co-Executive Chairman, Chief Executive Officer & President
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GIBRALTAR PARENT HOLDINGS LLC
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By:
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/s/ David J. Millstone | ||
Name:
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David J. Millstone
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Title:
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Co-Executive Chairman, Chief Executive Officer & President
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STANDARD INDUSTRIES INC.
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By:
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/s/ John Rebele | ||
Name:
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John Rebele
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Title:
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Executive Vice President and Chief Financial Officer
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STANDARD INDUSTRIES HOLDINGS INC.
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By:
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/s/ John Rebele | ||
Name:
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John Rebele
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Title:
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Executive Vice President and Chief Financial Officer
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40 NORTH MANAGEMENT LLC
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By:
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/s/ David S. Winter | ||
Name:
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David S. Winter
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Title:
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Principal
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By:
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/s/ David J. Millstone | ||
Name:
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David J. Millstone
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Title:
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Principal
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40 NORTH LATITUDE FUND LP
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By:
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/s/ David S. Winter | ||
Name:
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David S. Winter
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Title:
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Principal
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By:
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/s/ David J. Millstone | ||
Name:
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David J. Millstone
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Title:
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Principal
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40 NORTH GP III LLC
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By:
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/s/ David S. Winter | ||
Name:
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David S. Winter
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Title:
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Principal
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By:
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/s/ David J. Millstone | ||
Name:
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David J. Millstone
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Title:
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Principal
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40 NORTH LATITUDE MASTER FUND LTD.
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By:
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/s/ David S. Winter | ||
Name:
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David S. Winter
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Title:
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Director
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By:
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/s/ David J. Millstone | ||
Name:
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David J. Millstone
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Title:
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Director
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DAVID S. WINTER
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By:
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/s/ David S. Winter | ||
DAVID J. MILLSTONE
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By:
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/s/ David J. Millstone | ||
GUARANTOR:
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STANDARD INDUSTRIES HOLDINGS INC.
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By:
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/s/ John Rebele
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Name:
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John Rebele
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Title:
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Executive Vice President and Chief Financial Officer
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GUARANTEED PARTY:
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W. R. GRACE & CO.
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By:
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/s/ Hudson La Force
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Name:
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Hudson La Force
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Title:
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President and Chief Executive Officer
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Very Truly Yours,
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STANDARD INDUSTRIES HOLDINGS INC.
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By: /s/ John Rebele
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John Rebele
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Executive Vice President and Chief Financial Officer
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By:
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/s/ David J. Millstone
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Name: David J. Millstone | |
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Title: Co-Executive Chairman, Chief Executive Officer & President
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JPMORGAN CHASE BANK, N.A.
383 Madison Avenue
New York, NY 10179
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BNP PARIBAS
BNP PARIBAS SECURITIES CORP.
787 Seventh Avenue
New York, New York 10019
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DEUTSCHE BANK AG NEW YORK BRANCH
DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH
DEUTSCHE BANK SECURITIES INC.
60 Wall Street
New York, New York 10005
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CITIGROUP GLOBAL MARKETS INC.
388 Greenwich Street
New York, New York 10013
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MIZUHO BANK, LTD.
1271 Avenue of the Americas
New York, New York 10020
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HSBC SECURITIES (USA) INC.
HSBC BANK USA, N.A.
452 Fifth Avenue
New York, NY 10018
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THE TORONTO-DOMINION BANK, NEW YORK BRANCH
TD SECURITIES (USA) LLC
1 Vanderbilt Avenue
New York, NY 10017
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Very truly yours,
The provisions of this Commitment Letter are agreed to and
accepted as of the date first above written:
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JPMORGAN CHASE BANK, N.A.
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By:
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/s/ Christopher A. Salek
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Name: Christopher A. Salek
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Title: Executive Director
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BNP PARIBAS
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By:
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/s/ Denise Chow
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Name: Denise Chow
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Title: Managing Director
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By:
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/s/ Mara MacDonald
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Name: Mara MacDonald
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Title: Director
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BNP PARIBAS SECURITIES CORP.
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By:
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/s/ Denise Chow
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Name: Denise Chow
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Title: Managing Director
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By:
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/s/ Mara MacDonald
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Name: Mara MacDonald
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Title: Director
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CITIGROUP GLOBAL MARKETS INC.
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By:
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/s/ Kirkwood Roland
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Name: Kirkwood Roland
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Title: Managing Director
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DEUTSCHE BANK AG CAYMAN ISLANDS BRANCH
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By:
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/s/ Joseph Pandolfo
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Name: Joseph Pandolfo
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Title: Managing Director
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By:
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/s/ Alvin Varughese
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Name: Alvin Varughese
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Title: Managing Director
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DEUTSCHE BANK SECURITIES INC.
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By:
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/s/ Joseph Pandolfo
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Name: Joseph Pandolfo
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Title: Managing Director
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By:
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/s/ Alvin Varughese
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Name: Alvin Varughese
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Title: Managing Director
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DEUTSCHE BANK AG NEW YORK BRANCH
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By:
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/s/ Joseph Pandolfo
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Name: Joseph Pandolfo
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Title: Managing Director
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By:
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/s/ Alvin Varughese
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Name: Alvin Varughese
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Title: Managing Director
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MIZUHO BANK, LTD.
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By:
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/s/ Raymond Ventura
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Name: Raymond Ventura
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Title: Managing Director
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HSBC SECURITIES (USA) INC.
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By:
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/s/ Bernardo Matos
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Name: Bernardo Matos
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Title: Director
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HSBC BANK USA, N.A.
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By:
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/s/ Bernardo Matos
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Name: Bernardo Matos
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Title: Director
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THE TORONTO-DOMINION BANK, NEW YORK BRANCH
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By:
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/s/ Victoria Roberts
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Name: Victoria Roberts
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Title: Director
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TD SECURITIES (USA) LLC
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By:
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/s/ Marin L. Gagliardi
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Name: Marin L. Gagliardi
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Title: Managing Director
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GIBRALTAR ACQUISITION HOLDINGS LLC
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By:
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/s/ John F. Rebele
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Name:
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John F. Rebele
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Title:
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Executive Vice President & Chief Financial Officer
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(a) |
Pursuant to the terms of that certain Merger Agreement dated as of April 26, 2021 (the “Acquisition Agreement”), by and among you, Merger Sub and the Target, it is intended that the Borrower will acquire the Acquired Business
(such acquisition, the “Acquisition”).
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(b) |
The Borrower intends to:
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(i) |
obtain a new $2,500 million senior secured term loan B facility plus, at the Borrower’s option, an amount sufficient to fund any OID or upfront fees required in connection with the “market flex” provision of the Fee Letter (the “Term
Loan Facility”) having the terms set forth in Exhibit B; provided, that the aggregate principal amount of the Term Loan Facility will be reduced dollar-for-dollar by the aggregate
principal amount of any Rollover Notes (as defined below);
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(ii) |
obtain a new $450 million senior secured revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Senior Secured Facilities”) having the terms set forth in Exhibit B;
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(iii) |
either (x) issue and sell senior unsecured notes providing for gross proceeds of up to $955 million on or prior to the Closing Date (the “Notes”) pursuant to a 144A and/or Regulation S offering or other private placement or (y) to
the extent that all or a portion of such offering of Notes providing such amount of gross proceeds has not been entered into on or prior to the Closing Date, obtain up to $955 million in the aggregate (less the amount of any gross proceeds
from the issuance of Notes for purposes of consummating the Acquisition), under a senior unsecured bridge credit facility described in Exhibit C (the “Bridge Facility”), in each case, the proceeds of which will be used for
the purpose of consummating the Acquisition;
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(iv) |
an aggregate amount of cash and rollover equity contributed directly or indirectly to the Borrower by the Sponsor in the form of common or qualified preferred equity (any such preferred equity on terms that are reasonably satisfactory to
the Commitment Parties), its affiliated investment vehicles and other investors (including members of management of the Acquired Business) (collectively, the “Investors”) representing in the aggregate at least 35% of the sum of (i)
the aggregate amount of the loans borrowed under the Term Loan Facility on the Closing Date, (ii) the aggregate amount of the loans funded under the Revolving Credit Facility on the Closing Date, excluding the aggregate amount of any loans
under the Revolving Credit Facility to fund (A) working capital or (B) original issue discount or upfront fees as a result of “flex” as set forth in the Fee Letter, (iii) the aggregate amount of the Notes or loans borrowed under the Bridge
Facility, in each case on the Closing Date, (iv) the aggregate amount of the Rollover Notes, if any, on the Closing Date and (v) the amount of such cash and rollover equity contributed, in each case, on the Closing Date (collectively, the “Equity
Financing”); and
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(v) |
(x) all indebtedness of the Acquired Business under that certain Credit Agreement, dated as of April 3, 2018, among the Acquired Business, Goldman Sachs Bank USA and the other financial institutions party thereto, as amended, restated,
modified or supplemented from time to time (the “Existing Credit Agreement”), (y) all indebtedness of the Acquired Business in respect of its 5.625% Senior Notes due 2024 (the “2024 Notes”) and the related indenture, as
amended, restated, modified or supplemented from time to time and (z) all indebtedness of the Acquired Business in respect of its 4.875% Senior Notes due 2027 (the “2027 Notes” and, together with the 2024 Notes, the “Existing
Notes”) and the related indenture, as amended, restated, modified or supplemented from time to time, shall, in each case of (x) through (z), be paid in full, and all commitments, security interests and guaranties in connection
therewith shall be terminated and released (collectively, the “Refinancing”); provided, however, that the Borrower may elect to not repay all or part
of the Existing Notes (any Existing Notes not repaid on the Closing Date, “Rollover Notes”) and to secure any Rollover Notes equally and ratably with the Senior Secured Facilities, subject to customary intercreditor agreements; provided, further, that the aggregate principal amount of the Term Loan Facility will be reduced dollar-for-dollar by the aggregate principal amount of any
Rollover Notes.
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(c) |
The proceeds of the Senior Secured Facilities, the Notes and/or the Bridge Facility will be applied to pay all or a portion of the consideration for the Acquisition, the Refinancing and all or a portion of the fees and expenses incurred
in connection with the Transactions (such fees and expenses, the “Transaction Costs”).
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Borrower:
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Gibraltar Acquisition Holdings LLC (the “Borrower”).
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Guarantors:
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Holdings and each of the Borrower’s direct and indirect, existing and future, material wholly owned restricted subsidiaries organized under the laws of the United States, subject to customary limitations and
exclusions to be agreed (collectively, the “Guarantors”; together with the Borrower, the “Loan Parties”).
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Lead Arrangers and Bookrunning Managers:
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JPMCB, BNPPS, DBSI, Citi, Mizuho, HSBC Securities and TD (each, in its capacity as lead arranger and bookrunning manager, a “Lead Arranger” and, collectively, the “Lead Arrangers”).
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Administrative Agent and Collateral Agent:
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JPMCB (in its capacity as administrative agent and collateral agent, the “Administrative Agent”).
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Senior Secured Lenders:
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JPMCB, BNP, DBNY, Citi, Mizuho, HSBC Bank and TD (the “Initial Senior Secured Lenders” and, together with the other financial institutions selected by the Lead Arrangers and consented to by the Borrower (such
consent not to be unreasonably withheld, delayed or conditioned) to become lenders, the “Senior Secured Lenders”), other than Disqualified Institutions.
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Amount of Senior Secured Facilities:
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A $2,500 million senior secured term loan B facility, plus at the Borrower’s option, an amount sufficient to fund any OID or upfront fees imposed in connection with the “market flex” provisions of the Fee
Letter, minus the aggregate principal amount of any Rollover Notes (the “Term Loan Facility”); and
A $450 million senior secured revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Senior Secured Facilities”), available to be drawn in U.S. dollars,
Euros, Pounds Sterling and Canadian dollars.
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Use of Proceeds:
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The proceeds of the Term Loans will be used by the Borrower on the Closing Date (i) to pay, directly or indirectly, a portion of the consideration for the Acquisition, including any purchase price adjustments
pursuant to the Acquisition Agreement (ii) to fund any original issue discount or upfront fees (including any such OID or upfront fees due in connection with the “flex” provisions in the Fee Letter), and (iii) to pay costs and expenses
related to the Transactions, and any excess will be used for working capital and general corporate purposes.
The proceeds of the Revolving Loans will be used by the Borrower (a) on the Closing Date (i) to pay, directly or indirectly, a portion of the consideration for the Acquisition, including (x) any purchase
price adjustments pursuant to the Acquisition Agreement and (y) to pay costs and expenses related to the Transactions, in an aggregate amount under this clause (i) not to exceed $25 million, and (ii) to fund any original issue discount or
upfront fees due in connection with the “flex” provisions in the Fee Letter, and (b) after the Closing Date for working capital and general corporate purposes (including acquisitions, investments, restricted payments and other transactions
not prohibited by the Senior Secured Facilities Documentation).
Letters of Credit (as defined below) will be issued (a) on the Closing Date (i) to backstop or replace letters of credit, bank guarantees, performance bonds and similar obligations outstanding on the Closing
Date (including “grandfathering” of into the Revolving Credit Facility) or (ii) for other general corporate purposes (for the avoidance of doubt, other than as consideration for the Acquisition), and (b) after the Closing Date for general
corporate purposes.
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Letters of Credit:
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A portion of the Revolving Credit Facility not in excess of $100 million will be available to the Borrower for the purpose of issuing letters of credit in U.S. dollars, Euros, Pounds Sterling or Canadian
dollars (“Letters of Credit”). Letters of Credit may be issued on or after the Closing Date.
Letters of Credit will be issued by the Initial Senior Secured Lenders and/or other Senior Secured Lenders reasonably acceptable to the Borrower and the Administrative Agent (such consent not to be
unreasonably withheld, conditioned or delayed) who agree to issue Letters of Credit with each such Senior Secured Lender having a share of the Letter of Credit sublimit equal to its share of the Revolving Credit Facility commitments (each
an “Issuing Bank”). Each Letter of Credit shall expire not later than the earlier of (a) 12 months after its date of issuance (or such longer period as may be agreed by the Issuing Bank and the Borrower) and (b) the fifth business day prior
to the RCF Termination Date; provided that any letter of credit may provide for automatic renewal thereof for additional periods of up to 12 months (which in no event shall extend beyond the date
referred to in clause (b) above, except to the extent cash collateralized or backstopped pursuant to arrangements reasonably acceptable to the relevant Issuing Bank); provided, further that certain Issuing Banks shall only be obligated to issue standby letters of credit and not commercial letters of credit. The face amount of any outstanding Letter of Credit (and, without duplication,
any unpaid drawing in respect thereof) will reduce availability under the Revolving Credit Facility on a dollar-for-dollar basis.
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Incremental Facilities:
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The Senior Secured Facilities Documentation will permit the Borrower to (a) on or before the TLF Maturity Date, add one or more incremental term loan facilities to the Term Loan Facility (each, an “Incremental Term Loan Facility” and
together with the Term Loan Facility, the “Term Loan Facilities”) and (b) on or before the RCF Maturity Date, increase commitments under the Revolving Credit Facility or add one or more incremental revolving credit facilities to the
Revolving Credit Facility (each, an “Incremental Revolving Credit Facility” and together with the Revolving Credit Facility, the “Revolving Credit Facilities”; any Incremental Term Loan Facility or Incremental Revolving Credit Facility, an
“Incremental Facility”); provided that (i) no Senior Secured Lender will be required to participate in any such Incremental Facility, (ii) the loans under any such Incremental Facility shall rank pari passu or junior in right of payment and be unsecured or secured on a pari passu or junior basis with the Senior Secured Facilities, (iii) no default or
event of default exists or would exist after giving effect thereto (or, with respect to any Incremental Facility the making of which is conditioned upon the consummation of, and the proceeds of which will be used to finance, a permitted
acquisition or investment the consummation of which is not conditioned on third party financing (an “LCT”), the absence of a payment or bankruptcy default), (iv) the aggregate principal amount of the Incremental Facilities shall not exceed
the Available Incremental Amount (as defined below), (v) the representations and warranties in the Senior Secured Facilities Documentation shall be true and correct in all material respects immediately prior to, and after giving effect to,
the incurrence of such Incremental Facility (or, with respect to any Incremental Facility in connection with an LCT, customary limited conditionality representations and warranties), (vi) (A) any Incremental Facility that is pari passu with
the Senior Secured Facilities in right of payment and security will (1) with respect to mandatory prepayments, share on a pro rata basis or less than pro rata basis (but not greater than pro rata basis) with the Term Loans and (2) with
respect to voluntary prepayments, share on a pro rata basis, greater than pro rata basis or less than pro rata basis with the Term Loans, (B) any Incremental Term Loan Facility that is junior to the Senior Secured Term Facility will not
receive any mandatory prepayments prior to the repayment in full of the Senior Secured Term Facility and (C) the guarantors of, and collateral securing, any Incremental Facility will not include any guarantors or collateral (other than, to
the extent such Incremental Facility is funded into escrow, the escrow proceeds) other than those guaranteeing and securing the Senior Secured Facilities, (vii) the maturity date and weighted average life to maturity of any such Incremental
Term Loan Facility shall be no earlier than the maturity date and weighted average life to maturity, respectively, of the initial Term Loan Facility; provided that up to the greater of (A) $259 million and (B) 50% of Consolidated EBITDA (to
be defined consistent with the Documentation Principles) in the aggregate of Incremental Term Facilities and Incremental Equivalent Term Debt (as defined below) may have a maturity date and weighted average life to maturity that is earlier
than the maturity and weighted average life to maturity of the initial Term Loan Facility but not earlier than the maturity and weighted average life to maturity of the Revolving Credit Facility (the “Incremental Inside Maturity Date Debt
Cap”), (viii) the interest rates and amortization schedule applicable to any Incremental Term Facility shall be determined by the Borrower and the lenders thereunder; provided that with respect to
any Incremental Term Facility that (1) is originally incurred under the Non-Ratio Based Incremental Amount, (2) has an aggregate principal amount, together with any other Incremental Term Facilities that satisfy the requirements in clause
(1) and clauses (3) through (7), in excess of the greater of (I) $259 million and (II) 50% of Consolidated EBITDA (the “MFN Threshold”), (3) is secured by the Collateral on a pari passu basis with
the initial Term Loans, (4) is in the form of broadly syndicated floating rate U.S. dollar first lien term loans (other than term “A” loans), (5) matures within 12 months of the maturity date of the initial Term Loans (the “Outside Maturity
Date Carve-Out”), (6) is made on or prior to the date that is 6 months after the Closing Date and (7) is not incurred or established in connection with an acquisition or investment, the all-in-yield (whether in the form of interest rate
margins, original issue discount, upfront fees or benchmark rate floors) for such Incremental Term Facility (determined as of the initial funding date for such Incremental Term Facility) will not be more than 0.75% (the “MFN Differential”)
higher than the corresponding all-in-yield for the initial Term Loans unless the corresponding all-in-yield with respect to the initial Term Loans is increased by an amount equal to the difference between the all-in-yield with respect to
the Incremental Term Facility and the corresponding all-in-yield on the initial Term Loans, minus the MFN Differential (it being agreed that (x) original issue discount and upfront fees shall be equated to interest on the basis of a
four-year average life (or if less, the remaining life to maturity) and (y) any increase in yield to any existing facility required due to the application of a benchmark rate floor shall be effected solely through an increase in (or
implementation of, as applicable) any benchmark rate floor applicable to such existing facility) (this proviso, the “MFN Provision”), (ix) the Borrower shall have delivered such customary legal opinions, board resolutions, secretary’s
certificate, officer’s certificate and other documents, in each case consistent with those delivered on the Closing Date, as shall be reasonably requested by the Administrative Agent and (x) any Incremental Facility shall be on terms and
pursuant to documentation to be determined, provided, further that, to the extent such terms and documentation are not consistent with the Term Loan
Facility or the Revolving Credit Facility, as the case may be, or not materially more favorable (taken as a whole) to the lenders of such new Incremental Facility compared to the existing Term Loan Facilities (except to the extent permitted
by clause (vii) or (viii) above) or Revolving Credit Facilities, as the case may be, as determined in good faith by the Borrower, they shall be reasonably satisfactory to the Administrative Agent (it being understood that (x) no consent
shall be required to the extent such terms apply only after the latest maturity of any existing Term Loan Facility or Revolving Credit Facility and (y) to the extent that any financial maintenance covenant is added for the benefit of any
Incremental Facility, no consent shall be required from the Administrative Agent or any Senior Secured Lender to the extent that such financial maintenance covenant is also added for the benefit of the Senior Secured Facilities). The
proceeds of the Incremental Facility shall be used for general corporate purposes of the Borrower and its subsidiaries, including permitted acquisitions, investments, restricted payments and other uses not prohibited by the Senior Secured
Facilities Documentation.
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The aggregate principal amount of Incremental Facilities permitted at any time shall not exceed (v) the greater of (i) $517 million and (ii) 100% of Consolidated EBITDA for the prior four consecutive fiscal
quarters (the “Free and Clear Incremental Amount”) plus (w) the principal amount of any voluntary prepayments and payments utilizing the yank-a-bank provision (other than any such prepayments made
from the proceeds of long-term indebtedness) of any tranche of term loans under the Term Loan Facility or any other debt secured on a pari passu basis with the term Loan Facility plus (x) an unlimited amount of debt that is secured on a pari passu basis with the initial Senior Secured Facilities if, after giving pro forma effect to the
incurrence of such additional amount (and after giving effect to any acquisition consummated in connection therewith and all customary pro forma events and adjustments), the First Lien Net Leverage Ratio (to be defined in the Senior Secured
Facilities Documentation consistent with the Documentation Principles) is equal to or less than either (A) the First Lien Net Leverage Ratio on the Closing Date (the “Closing Date First Lien Net Leverage Ratio”) or (B) in the case of
incremental facilities incurred in connection with a Permitted Acquisition or investment, the First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or investment plus (y) an
unlimited amount of junior lien debt if the Secured Net Leverage Ratio (to be defined consistent with the Documentation Principles) is equal to or less than either (A) the Secured Net Leverage Ratio on the Closing Date (the “Closing Date
Secured Net Leverage Ratio”) or (B) in the case of incremental facilities incurred in connection with a Permitted Acquisition or investment, the Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or investment plus (z) an unlimited amount of unsecured debt (I) if the Total Net Leverage Ratio (to be defined consistent with the Documentation Principles) is equal to or less than either (A) the Total Net Leverage
Ratio on the Closing Date (the “Closing Date Total Net Leverage Ratio”) or (B) in the case of incremental facilities incurred in connection with a Permitted Acquisition or investment, the Total Net Leverage Ratio immediately prior to such
Permitted Acquisition or investment or (II) if the Fixed Charge Coverage Ratio (to be defined in the Senior Secured Facilities Documentation consistent with the Documentation Principles) is equal to or greater than either (A) 2.00:1.00 or
(B) in the case of incremental facilities incurred in connection with a Permitted Acquisition or investment, the Fixed Charge Coverage Ratio immediately prior to such Permitted Acquisition or investment (the sum of the amounts in clauses
(v) and (w), the “Non-Ratio Based Incremental Amount”; the sum of the amounts in clauses (x), (y) and (z), the “Ratio Based Incremental Amount”; and the Ratio Based Incremental Amount, together with the Non-Ratio Based Incremental Amount,
the “Available Incremental Amount”); provided that (X) the Borrower may elect to use any component (or one or more components) of the Available Incremental Amount in its sole discretion, and if
there is capacity under the Ratio Based Incremental Amount at any time that Incremental Facilities are incurred and the Borrower does not otherwise make an election, the Borrower will be deemed to have elected the Ratio Based Incremental
Amount and (Y) the Available Incremental Amount shall be subject to the Stacking and Reclassification Provisions (as defined below) (and, for the avoidance of doubt, any portion of any Incremental Facility incurred in reliance on the
Non-Ratio Based Incremental Amount shall be automatically reclassified as incurred under the Ratio Based Incremental Amount at such time as the Borrower meets the applicable ratio under the Ratio Based Incremental Amount at such time on a
pro forma basis).
In addition, the Borrower may, in lieu of adding Incremental Facilities, utilize any part of the Available Incremental Amount at any time by issuing or incurring Incremental Equivalent Debt (as defined
below), subject to customary terms and conditions consistent with the Documentation Principles and customary intercreditor documentation, if applicable).
“Incremental Equivalent Debt” means indebtedness in an amount not to exceed the then available Available Incremental Amount consisting of the issuance of senior secured (on a pari passu basis), junior lien, unsecured or subordinated notes or loans (including “mezzanine” debt and bridge loans), in each case, issued in a public offering, Rule 144A transaction or other private placement.
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Refinancing Facility:
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The Senior Secured Facilities Documentation will permit the Borrower to refinance loans and commitments under the Senior Secured Facilities, in whole or in part (which may include the issuance of secured,
unsecured, subordinated or convertible notes (“Refinancing Notes”) or loans (each, a “Refinancing Facility”)); provided that, (i) the all-in-yield with respect to any such Refinancing Notes or Refinancing Facility shall be determined by
Borrower and the lenders providing such Refinancing Notes or Refinancing Facility, as applicable, (ii) any Refinancing Notes or Refinancing Facility does not mature prior to the maturity date of, or have a shorter weighted average life
than, the loans or commitments being refinanced, (iii) no Refinancing Notes or Refinancing Facility, if secured, may be secured by any assets other than the Collateral, or, if guaranteed, may be guaranteed by any entities other than the
Guarantors, (iv) the mandatory prepayment and redemption terms, covenants and events of default of such Refinancing Facility or Refinancing Notes are either (x) not materially more favorable (taken as a whole, as conclusively determined by
the Borrower in good faith) to the lenders providing such Refinancing Facility or Refinancing Notes, as applicable, than those terms (taken as a whole) applicable to the Term Loan Facility or Revolving Credit Facility being refinanced
(except to the extent such terms apply solely to any period after the latest maturity of any existing Term Loan Facility or Revolving Credit Facility or are applied for the benefit of the Term Loan Facilities or Revolving Credit Facilities
then outstanding) or (y) reflect market terms and conditions at the time of incurrence or issuance, as reasonably determined by the Borrower in good faith, (v) any Refinancing Facility that is secured shall be subject to a customary
intercreditor agreement reasonably satisfactory to the Administrative Agent and Borrower, (vi) the aggregate principal amount of any Refinancing Facility does not exceed the aggregate amount of debt or commitments being refinanced
therewith, plus interest, fees, expenses and premium (including make-whole premiums, prepayment premiums and amounts required to be paid in connection with defeasance and satisfaction and discharge), plus the costs, fees and expenses of
incurring such Refinancing Facility (including upfront fees and original issue discount) and (vii) the proceeds of such Refinancing Facility or Refinancing Notes shall be applied, substantially concurrently with the incurrence thereof, to
the pro rata prepayment of outstanding loans under the applicable Term Loan Facility or Revolving Credit Facility being so refinanced; and provided further
that in no event shall Refinancing Facility or Refinancing Notes be permitted to be voluntarily prepaid prior to the repayment in full of the applicable Term Loan Facility or Revolving Credit Facility being refinanced, unless accompanied by
a ratable prepayment of such Term Loan Facility or Revolving Credit Facility.
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Fees and Interest Rates:
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As set forth on Annex I to Exhibit B.
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Optional Prepayments:
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Term Loans may be prepaid, in whole or in part, without premium or penalty (except as provided below), at the option of the Borrower at any time upon one day’s (or, in the case of a prepayment of Eurodollar
Loans (as defined in Annex I hereto), three days’) prior notice, subject to reimbursement of the Term Loan Lenders’ redeployment costs in the case of a prepayment of Eurodollar Loans prior to the last day of the relevant interest period.
Optional prepayments of the Term Loans shall be applied as directed by the Borrower.
Any (a) voluntary prepayment of the Term Loans using proceeds of indebtedness incurred by the Borrower or any of its subsidiaries from a substantially concurrent incurrence of indebtedness the primary purpose
of which is to, and which does, reduce the all-in yield (calculated as described under “Incremental Facility” above) then in effect for the Term Loans and (b) repricing of the Term Loans pursuant to an amendment to the Senior Secured
Facilities Documentation the primary purpose of which is to, and which does, reduce the all-in yield then in effect for the Term Loans shall be accompanied by a prepayment fee equal to 1.0% of the aggregate principal amount of such
prepayment (or, in the case of clause (b) above, of the aggregate amount of Term Loans outstanding immediately prior to such amendment) if made on or prior to the six-month anniversary of the Closing Date; provided
that no such prepayment fee shall be required in connection with a change of control or a Transformative Acquisition (as defined below).
“Transformative Acquisition” means any acquisition by the Borrower or any of its subsidiaries of an unrelated third party that is either (a) not permitted by the terms of the Senior Secured Facilities
Documentation immediately prior to the consummation of such acquisition or (b) if permitted by the terms of the Senior Secured Facilities Documentation immediately prior to the consummation of such acquisition, would not provide the
Borrower and its subsidiaries with adequate flexibility under the Senior Secured Facilities Documentation for the continuation and/or expansion of their combined operations following such consummation (as determined by the Borrower acting
in good faith).
The Revolving Credit Facility may be prepaid, in whole or in part (and the unutilized portion of the commitments thereunder may be cancelled), in each case without premium or penalty, at the option of the
Borrower at any time upon one day’s (or, in the case of a prepayment of Eurodollar Loans (as defined in Annex I hereto), three days’) prior notice, subject to reimbursement of the Revolving Lenders’ redeployment costs in the case of a
prepayment of Eurodollar Loans prior to the last day of the relevant interest period.
Any notice of voluntary prepayment or commitment reduction may be conditioned on the satisfaction of one or more conditions (subject to the payment of applicable breakage, if any).
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Mandatory Prepayments:
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The Borrower shall make (or shall cause to be made) the following mandatory prepayments with respect to the Term Loan Facility only, with such prepayment obligations being subject to certain exceptions and
basket amounts consistent with the Documentation Principles:
1. Asset Sales and Casualty Events: Prepayments in an amount equal to 100% of the net cash proceeds from any non-ordinary course sale or other disposition of assets (including as a result of
casualty or condemnation) by the Borrower and its restricted subsidiaries in excess of individual and aggregate thresholds to be agreed (subject to other exceptions to be reasonably and mutually agreed consistent with the Documentation
Principles), subject to (a) reduction to 50% upon the First Lien Net Leverage Ratio being equal to or less than 0.50x inside the Closing Date First Lien Net Leverage Ratio and (b) elimination upon the First Lien Net Leverage Ratio being
equal to or less than 1.0x inside the Closing Date First Lien Net Leverage Ratio and subject to the right of the Loan Parties to reinvest (or commit to reinvest) such proceeds to acquire, maintain, develop, construct, improve, upgrade or
repair assets useful in the business of the Loan Parties and their subsidiaries if such proceeds are reinvested (or committed to be reinvested) within eighteen (18) months (and if so committed to reinvestment, reinvested within 180 days
following the end of such eighteen (18) month period), it being understood and agreed that pending the reinvestment of such proceeds, such proceeds shall be held by a Loan Party and available for general working capital purposes, including
repayment of borrowings under the Revolving Credit Facility.
2. Incurrence of Indebtedness: Prepayments in an amount equal to 100% of the net cash proceeds from issuances or incurrences of debt by the Borrower and its restricted subsidiaries (other than
indebtedness permitted by the Senior Secured Facilities Documentation (other than refinancing indebtedness)).
3. Excess Cash Flow: Commencing with the end of the first full fiscal year ending after the Closing Date, prepayments in an amount equal to 50%, subject to (a) reduction to 25% upon the First Lien
Net Leverage Ratio being equal to or less than 0.50x inside the Closing Date First Lien Net Leverage Ratio and (b) elimination upon the Consolidated First Lien Net Leverage Ratio being equal to or less than 1.0x inside the Closing Date
First Lien Net Leverage Ratio, of Excess Cash Flow (to be defined in the Senior Secured Facilities Documentation and calculated net of any amounts paid for permitted investments or restricted payments or committed to be paid in the next 12
months (provided that, to the extent such committed amounts are not paid in the subsequent period such amounts shall increase Excess Cash Flow in such subsequent period)) of the Borrower and its restricted subsidiaries; provided that (i) any voluntary prepayments of any long-term indebtedness secured on a pari passu basis with the Term Loan Facility during the applicable fiscal
year or after the end of such fiscal year and prior to the date on which the Excess Cash Flow prepayment is required to be made, including the aggregate amount of any prepayment of the Term Loan Facility during the applicable fiscal year or
after the end of such fiscal year and prior to the date on which the Excess Cash Flow prepayment is required to be made, and (ii) any prepayment of loans outstanding under the Revolving Credit Facility or any other revolving credit facility
secured on a pari passu basis with the Term Loan Facility (to the extent accompanied by a permanent reduction of the commitments under the Revolving Credit Facility or such other revolving credit
facility secured on a pari passu basis with the Term Loan Facility), in each case other than prepayments funded with the proceeds of long-term indebtedness, shall be credited against Excess Cash
Flow prepayment obligations for the applicable fiscal year on a dollar-for-dollar basis.
All mandatory prepayments will be applied without penalty or premium (except for breakage costs, if any).
Mandatory prepayments shall be applied to the installments of the loans under the Term Loan Facility as directed by the Borrower (or in the absence of direction from the Borrower in the direct order of
maturity).
Notwithstanding the foregoing, mandatory prepayments made pursuant to clauses (1) and (3) above shall be (x) net of any additional taxes paid, or estimated by the Borrower in good faith to be payable, as a
result of the repatriation of such proceeds and (y) limited to the extent that the Borrower reasonably determines that such prepayment would result in material adverse tax consequences related to the repatriation of funds or such
repatriation would be prohibited or restricted by applicable law, rule or regulation (amounts excluded pursuant to the preceding clauses (x) and (y), the “Excluded Amounts”). Excluded Amounts will not be deemed to be net cash proceeds or
Excess Cash Flow for purposes of clauses (1) and (3) above and may be used by the Borrower for any other use not prohibited by the Senior Secured Facilities Documentation.
Any Term Loan Lender may elect not to accept its pro rata portion of any mandatory prepayment, and any such declined prepayment may be retained by the Borrower and shall be an addition to the Available Amount
Basket (as defined below).
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Prepayments Below Par:
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The Senior Secured Facilities Documentation shall provide that Term Loans may be prepaid below par on a non-pro rata basis through Dutch auction or similar procedures that are offered to all Term Loan Lenders
holding Term Loans of the applicable tranche on a pro rata basis. Any Term Loan so prepaid shall automatically be canceled and retired. The Borrower may also purchase any Term Loan on a non-pro rata basis at any time through open market
purchases or in privately negotiated transactions on customary terms and conditions consistent with the Documentation Principles (including no use of Revolving Loans).
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Collateral:
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Subject to the Documentation Principles and customary exceptions, the Senior Secured Facilities will be secured by a first-priority security interest in substantially all present and after acquired tangible
and intangible property of the Borrower and Guarantors (the “Collateral”).
There shall be no requirement to (i) obtain mortgages on any owned or leased real property unless, in the case of owned real property, its fair market value is more than $20 million, (ii) obtain any deposit
account or securities account control agreements or (iii) grant any security or take any perfection actions under non-US law, except for local law equity pledges for material top-tier foreign subsidiaries.
The Senior Secured Facilities Documentation will authorize the Administrative Agent to enter into any acceptable intercreditor agreement contemplated by the Senior Secured Facilities Documentation which
allows (at the Borrower’s option) additional debt that is permitted to be incurred and secured under the Senior Secured Facilities Documentation to be secured by a lien on the Collateral on a pari passu
or junior basis with the Senior Secured Facilities.
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Notwithstanding the foregoing, the requirements of the preceding paragraphs of this “Security” section shall be subject to the Limited Conditionality Provisions of this Commitment Letter and Exhibit D hereto.
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Conditions Precedent to Closing Date:
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The availability of the Loans and Letters of Credit under the Senior Secured Facilities on the Closing Date will be subject solely to the conditions expressly set forth in Exhibit D to the Commitment Letter,
subject to the Limited Conditionality Provisions.
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Conditions precedent to each subsequent extension of Credit under the Senior Secured Facilities:
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For each borrowing of Loans or issuance, amendment or extension of a Letter of Credit after the Closing Date, all of the representations and warranties in the Credit Documentation (or, in the case of an
Incremental Facility in connection with an LCT, customary limited conditionality representations and warranties) shall be true and correct in all material respects (but in all respects if such representation or warranty is qualified by
“material” or “Material Adverse Effect” or if it speaks to an earlier date, then only as of such earlier date); no default or event of default (or, in the case of an Incremental Facility in connection with an LCT, no payment or bankruptcy
default or event of default) shall be continuing or result therefrom; and delivery of any relevant borrowing notices or Letter of Credit requests.
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Documentation Principles:
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The Credit Facility Documentation for the Senior Secured Facilities (the “Senior Secured Facilities Documentation”) will be drafted by counsel to the Borrower and negotiated in good faith by the Borrower and
the Commitment Parties giving effect to the Limited Conditionality Provisions, will be based on the Existing Credit Agreement, and will otherwise be usual and customary for financings of this kind reflecting (a) the operational and
strategic requirements of the Borrower and its subsidiaries (after giving effect to the Transactions) in light of their capitalization, size, business, industry and business practices, matters disclosed in the Acquisition Agreement and
their proposed business plan and operations, (b) take into account the financial model most recently provided by you to the Original Commitment Parties prior to the Original Signing Date, (c) take into account operational and administrative
requirements of the Administrative Agent, (d) the Administrative Agent’s Revlon provisions, (e) changes in law, applicable regulation or accounting standards since the date of such precedent, (f)
customary updates with respect to “divisions”, “QFC Stay” and EEA/UK Bail-In provisions and (g) provide that no subsidiary Guarantor shall be released from its guarantee solely as a result of such Guarantor becoming a non-wholly owned
subsidiary unless such transfer of equity interests in such Guarantor is with a third-party that is not an affiliate of Holdings or its subsidiaries and is consummated for a bona fide business purpose, and shall be in a form such that, if
and when executed and delivered, they are consistent with this Commitment Letter (including the Limited Conditionality Provisions) and the Fee Letter and would not impair availability of the Senior Secured Facilities on the Closing Date
(collectively, for purposes of this Exhibit B, the “Documentation Principles”). The Senior Secured Facilities Documentation shall contain only those payments, conditions to borrowing, mandatory prepayments, representations and warranties,
covenants and events of default expressly set forth in this Exhibit B, in each case, applicable to the Borrower and the restricted subsidiaries and with standards, qualifications, thresholds, exceptions, “baskets” and grace and cure periods
consistent with the Documentation Principles. To the extent not otherwise set forth in this Exhibit B, the financial definitions and ratios in the Senior Secured Facilities Documentation shall be defined in a manner consistent with the
Documentation Principles.
Each covenant (including with respect to clauses (c), (d) and (e) below, without limitation, the Incremental Facilities and Incremental Equivalent Debt) (and definitions used therein) shall also (a) include additional customary baskets,
exceptions and thresholds consistent with the Documentation Principles and as may otherwise be agreed, including customary specific and general dollar baskets, (b) any exceptions, limitations and baskets based on a specified dollar amount
shall also include a builder or grower component (regardless of whether such exceptions, limitations or baskets refer to a builder or grower component in this Summary of Terms) based on a corresponding percentage of Consolidated EBITDA, (c)
provide that incurrence-based financial ratios or tests (“Financial Incurrence Tests”) shall be subject to customary pro forma adjustments, including for “run rate” cost savings and synergies consistent with those described in the
definitions of “Consolidated Net Income” and “Consolidated EBITDA” (without duplication of any adjustments), (d) permit reliance, at the Borrower’s option, on one or more, or a combination of, baskets, exceptions and thresholds that are not
subject to a Financial Incurrence Test (including any fixed dollar (including any related builder or grower component) baskets, exceptions and thresholds) (“Fixed Baskets”) and baskets, exceptions and thresholds that are subject to a
Financial Incurrence Test (“Non-Fixed Baskets”) (and the Borrower shall be permitted to, at its option, divide and classify such actions or transactions (or portions thereof) and later (on one or more occasions) re-divide and/or reclassify
under one or more of such baskets, exceptions and thresholds within the same covenant, including to reclassify utilization of any Fixed Baskets as incurred under any available Non-Fixed Baskets, including any Financial Incurrence Tests; provided, that, for the avoidance of doubt and other than with respect to reclassification pursuant to the RP Debt Basket, reallocation of the General RP Basket to the General Junior Debt Prepayment
Basket or the General Investment Basket, reclassification shall only be permitted between baskets within the same covenant; provided, further, that if any Financial Incurrence Tests would be
satisfied in any subsequent fiscal quarter following the utilization of any Fixed Basket or other Non-Fixed Basket, such reclassification shall be deemed to have automatically occurred if not elected by the Borrower) and (e) in calculating
any Non-Fixed Baskets (including any Financial Incurrence Tests), any amounts incurred in reliance on a Fixed Basket (including the Free and Clear Incremental Amount) substantially concurrently with the amount incurred under such Non-Fixed
Basket, in each case, shall not be given effect (but full pro forma effect shall be given to all applicable and related transactions (including the use of proceeds of all indebtedness to be incurred and any repayments, repurchases and
redemptions of indebtedness) and all other permitted pro forma adjustments) (this clause (e), together with clause (d) above, collectively, the “Stacking and Reclassification Provisions”).
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“Consolidated Net Income”, “Consolidated EBITDA” (and component definitions) and other financial definitions shall be defined in a manner consistent with the Documentation Principles (including add-backs and
deductions consistent therewith). In any event, Consolidated EBITDA and Consolidated Net Income shall include (without duplication and which shall not be subject to caps), among other adjustments, exclusions and add-backs: (a)
extraordinary, unusual, infrequent or non-recurring losses, gains or expenses and transaction expenses; (b) non-cash charges, fees, expenses, expenditures, costs, losses, accruals, reserves of any kind and changes in reserves for earnouts
and similar obligations; provided that accruals or reserves for potential cash items in any future period may or may not (at the election of the Borrower in its sole discretion) be added back in such period and to the extent added back, the
cash payment in respect of such accrual or reserve in a future period shall be subtracted from Consolidated EBITDA in such future period; (c) all gains and losses on sales of assets outside the ordinary course of business; (d) restructuring
and business optimization losses, charges, expenses, accruals or reserves, including any system implementation costs, costs related to the closure, relocation, reconfiguration and/or consolidation of facilities, and costs to relocate
employees, retention charges, severance, contract termination costs, transition and other duplicative running costs; (e) currency translation and transaction gains or losses; (f) non-controlling or minority interest expense consisting of
income attributable to third parties in non-wholly owned subsidiaries; (g) pro forma adjustments, including pro forma “run rate” cost savings, operating expense reductions, operating improvements (including the entry into, amendment or
renegotiation of any material contract or arrangement) and other cost synergies (in each case net of amounts actually realized) related to acquisitions, dispositions and other specified transactions, or related to restructuring initiatives,
cost savings initiatives and other initiatives, in each case, that are reasonably identifiable and factually supportable and projected by the Borrower in good faith to result from actions that have either been taken, with respect to which
substantial steps have been taken or are that are expected to be taken (in the good faith determination of the Borrower) within 24 months after the date of consummation of such acquisition, disposition or other specified transaction or the
initiation of such restructuring initiative, cost savings initiative or other initiatives; (h) effects of purchase accounting; (i) accruals, payments, fees, costs, charges and expenses with respect to any transactions not prohibited by the
Senior Secured Facilities Documentation, including, without limitation, permitted dispositions, investments, issuance of equity interests or indebtedness or early extinguishment of indebtedness, hedging agreements or other derivative
instruments, in each case whether or not consummated; and (j) adjustments (x) consistent with Regulation S-X or (y) contained in any quality of earnings report in connection with a Permitted Acquisition made available to the Administrative
Agent conducted by financial advisors (which are either nationally recognized or reasonably acceptable to the Administrative Agent (it being understood and agreed that any of the “Big Four” accounting firms is acceptable)).
With respect to any exceptions, limitations and baskets based on a specified dollar amount and a builder or grower component based on a corresponding percentage of Consolidated EBITDA, the dollar amount may
be reset at the time syndication to the greater of the dollar amount set forth in this Summary of Terms and a dollar amount equal to the product of the percentage of Consolidated EBITDA set forth in this Summary of Terms and Consolidated
EBITDA at the time of syndication.
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Financial Maintenance Covenant:
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Term Loan Facility: None.
Revolving Credit Facility: A maximum First Lien Net Leverage Ratio covenant set at a 35% cushion to pro forma Consolidated EBITDA as of the Closing Date, with no step-downs (the “Financial Maintenance
Covenant”).
The Financial Maintenance Covenant will be tested quarterly, only in the event that on the last day of any fiscal quarter (commencing with the first full fiscal quarter after the Closing Date) Revolving Loans
outstanding under the Revolving Credit Facility (excluding any undrawn Letters of Credit that have not been cash collateralized in an aggregate amount not exceeding $25 million and any drawn or undrawn Letters of Credit that have been cash
collateralized), in the aggregate, exceed 35% of the total amount of the Revolving Credit Facility commitments. If tested for any fiscal quarter, the Financial Maintenance Covenant will be tested as of the last day of such fiscal quarter,
on the date that financial statements are (or are required to be) delivered for the fiscal quarter or fiscal year ended on such date.
The amount of all cash equity, which may be common or qualified preferred equity of Borrower, contributed to Borrower following the last day of the applicable fiscal quarter and through the date that is no
more than 10 business days after the date on which financial statements are required to be delivered by Borrower for the fiscal quarter or fiscal year ended on such date, will, at the request of Borrower, be an addition to Consolidated
EBITDA solely for the purposes of calculating the Financial Maintenance Covenant at the end of such fiscal quarter and applicable subsequent periods which include such fiscal quarter (any such contribution, an “Equity Cure”) (which for the
avoidance of doubt, shall be disregarded for any other purposes, including the calculation of any interest rate margin, any financial ratio-based condition or any basket applicable to any covenant (including, without limitation, the
Available Amount Basket)); provided that (i) there shall not be more than two (2) Equity Cures in any four (4) quarter period, (ii) there shall not be more than five (5) Equity Cures over the life
of the Revolving Credit Facility, (iii) no pro forma effect will be given to any debt repayment with proceeds of Equity Cures in calculating the Financial Maintenance Covenant and (iv) the amount of any such equity contribution in
connection with an Equity Cure shall not exceed the amount necessary for Borrower to be in compliance with the Financial Maintenance Covenant.
The Senior Secured Facilities Documentation will contain a standstill provision with regard to exercise of remedies during the period in which any Equity Cure will be made (it being understood that Revolving
Loans and issuance of new Letters of Credit will be unavailable).
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Financial Leverage Ratios:
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Any leverage ratio shall be calculated net of all unrestricted cash and cash equivalents.
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Representations and Warranties:
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Consistent with the Documentation Principles and limited to the following (applicable to Holdings, the Borrower and its restricted subsidiaries and with exceptions, materiality and other qualifications to be
set forth in the Senior Secured Facilities Documentation): financial statements; corporate (or similar) existence; compliance with materials law; corporate (or similar) power and authority; due authorization, execution and delivery and
enforceability of Senior Secured Facilities Documentation; with respect to the applicable Senior Secured Facilities Documentation, no violation of, or conflict with, material law or charter documents; litigation; no default; ownership of
property; liens (subject to permitted liens and the Limited Conditionality Provisions); intellectual property; taxes; Federal Reserve regulations; labor matters; ERISA; Investment Company Act; anti-corruption laws, anti-money laundering
laws, bribery and sanctions; PATRIOT Act; subsidiaries; use of proceeds; environmental laws; materially accurate disclosure as of the Closing Date; Closing Date solvency of Holdings and its subsidiaries taken as a whole (consistent with the
solvency certificate attached as Annex I to Exhibit D hereto); governmental authorizations; no Material Adverse Effect; perfection in collateral; no Loan Party being an Affected Financial Institution (to be defined in a customary manner);
beneficial ownership.
“Material Adverse Effect” means (a) on the Closing Date, a “Material Adverse Effect” (as defined in the Acquisition Agreement) and (b) after the Closing Date, a material adverse effect on (i) the business,
financial condition or results of operations, of Holdings, the Borrower and its restricted subsidiaries, taken as a whole, (ii) the ability of the Borrower and the other Loan Parties, taken as a whole, to perform their payment obligations
under the Senior Secured Facilities Documentation or (iii) the rights and remedies of the Administrative Agent under the Senior Secured Facilities Documentation.
Subject to the Limited Conditionality Provisions, only the Specified Representations will be required to be made on the Closing Date.
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Affirmative Covenants:
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Consistent with the Documentation Principles and limited to the following (applicable to the Borrower and its restricted subsidiaries and with exceptions, materiality and other qualifications to be set forth
in the Senior Secured Facilities Documentation): delivery of annual (within 120 days of the end of each fiscal year) and quarterly (limited to the first three fiscal quarters of the fiscal year only and 60 days after each fiscal quarter)
financial statements, quarterly and annual MD&A, annual budget, notices, officer’s certificates and other customary information reasonably requested by the Senior Secured Lenders through the Administrative Agent; payment of taxes;
maintenance of existence; compliance with material laws; maintenance of policies and procedures designed to ensure compliance with anti-corruption, bribery and sanctions laws; maintenance of property and insurance; maintenance of books and
records; right of the Senior Secured Lenders to inspect property and books and records; compliance with environmental laws; additional guarantors and collateral; further assurances (including, without limitation, with respect to security
interests in after-acquired property); beneficial ownership information; and commercially reasonable efforts to maintain monitored public family/corporate credit and facility ratings, but not any specific rating.
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Negative Covenants:
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Negative covenants shall be consistent with the Documentation Principles and limited to the following (to be applicable to the Borrower and its restricted subsidiaries and, in respect of the passive holding
company covenant, Holdings):
(a) indebtedness (including guarantee obligations and disqualified stock of subsidiaries), which shall permit, among other things, (i) indebtedness pursuant to a general indebtedness basket in an amount up to
the greater of (x) $207 million and (y) 40% of Consolidated EBITDA (provided, that, at the option of the Borrower, amounts then available under this clause (i) may be re-allocated to the Free and Clear Incremental Amount, which, to the
extent re-allocated and an Incremental Facility or Incremental Equivalent Debt is then outstanding in reliance on such re-allocated amount, shall be deemed to be a utilization hereof) (the “General Debt Basket”), (ii) indebtedness under the
Senior Secured Facilities or any Incremental Facility, any Incremental Equivalent Debt, any Refinancing Facility or any refinancing of the foregoing; (iii) indebtedness incurred to finance the acquisition of fixed or capital assets
(including finance lease obligations, mortgage financings and purchase money obligations) in an aggregate outstanding amount not to exceed the greater of (x) $78 million and (y) 15% of Consolidated EBITDA; (iv) (x) an unlimited amount of debt that is secured on a pari passu basis with the initial Senior Secured Facilities if the pro forma First Lien Net Leverage Ratio is equal to or less
than (A) the Closing Date First Lien Net Leverage Ratio or (B) in the case of such debt incurred in connection with a Permitted Acquisition or investment, the First Lien Net Leverage Ratio immediately prior to such Permitted Acquisition or
investment plus (y) an unlimited amount of junior lien debt if the Secured Net Leverage Ratio is equal to or less than either (A) the Closing Date Secured Net Leverage Ratio or (B) in the case of
such debt incurred in connection with a Permitted Acquisition or investment, the Secured Net Leverage Ratio immediately prior to such Permitted Acquisition or investment plus (z) an unlimited amount
of unsecured debt (I) if the Total Net Leverage Ratio is equal to or less than (A) the Closing Date Total Net Leverage Ratio or (B) in the case of such debt incurred in connection with a Permitted Acquisition or investment, the Total Net
Leverage Ratio immediately prior to such Permitted Acquisition or investment or (II) if the Fixed Charge Coverage Ratio is equal to or greater than (A) 2.00:1.00 or (B) in the case of such debt incurred in connection with a Permitted
Acquisition or investment, the Fixed Charge Coverage Ratio immediately prior to such Permitted Acquisition or investment (the “Ratio Debt Basket”; any such indebtedness described in this clause (iv), “Ratio Debt”); provided that the incurrence of such indebtedness by restricted subsidiaries that are not Loan Parties shall not exceed, when taken together with amounts incurred by restricted subsidiaries that are not Loan Parties under
clause (vii) below, the greater of (x) $259 million and (y) 50% of Consolidated EBITDA; (v) indebtedness in an amount equal to 200% of the net cash proceeds from the sale or issuance of qualified equity interests or capital contributions
received by the Borrower after the Closing Date (“Contribution Debt”); (vi) indebtedness in an amount not to exceed the aggregate amount of dividends and other distributions on account of equity interests which could be made at such time
under the restricted payments covenant baskets (any such indebtedness described in this clause (vi), “RP Debt”) provided that, for the avoidance of doubt, any such incurrence of RP Debt shall be deemed a usage of the applicable restricted
payments covenant baskets; (vii) indebtedness incurred or assumed by the Borrower or its restricted subsidiaries in connection with an acquisition of an entity that becomes a restricted subsidiary or all or substantially all of the assets
of any person or any line of business or division thereof, or of a majority of the equity interests of any person (but in any event to include any investments in a subsidiary which serves to increase the Borrower’s or its restricted
subsidiaries’ respective equity ownership therein) (a “Permitted Acquisition”); provided that after giving pro forma effect thereto the Borrower could incur an additional $1.00 of Ratio Debt; provided, further, that the incurrence of such indebtedness by restricted subsidiaries that are not Loan Parties shall not exceed, when taken together with Ratio Debt incurred by restricted subsidiaries
that are not Loan Parties, the greater of (x) $259 million and (y) 50% of Consolidated EBITDA; (viii) indebtedness incurred by foreign subsidiaries under local facilities in an amount up to the greater of (x) $129 million and (y) 25% of
Consolidated EBITDA; (ix) indebtedness under any Rollover Notes, and (x) other customary exceptions and exceptions consistent with the Documentation Principles;
(b) liens, which shall permit, among other things, (i) liens pursuant to a general lien basket in an amount up to the greater of (x) $207 million and (y) 40% of Consolidated EBITDA, (ii) liens securing
indebtedness assumed in connection with an acquisition that is permitted under the Senior Secured Facilities Documentation; provided that such liens were not incurred in contemplation of such
acquisition and do not encumber any property other than the property acquired pursuant to such acquisition, (iii) liens on assets of subsidiaries that are not Loan Parties, (iv) liens contemplated with respect to secured indebtedness
described above, including for the avoidance of doubt the Senior Secured Facilities, any incremental facilities, incremental equivalent debt or permitted refinancing facilities; (v) liens securing any Rollover Notes, and (vi) other
customary exceptions and exceptions consistent with the Documentation Principles;
(c) mergers, consolidations, liquidations and dissolutions, which shall permit, among other things, non-Loan Parties to consolidate or merge with, or transfer assets in connection with a liquidation or
dissolution to, other non-Loan Parties;
(d) sales of assets, which shall permit, among other things, (i) sale of inventory and equipment in the ordinary course of business, (ii) [reserved], (iii) dispositions of non-core assets acquired in
connection with any acquisition or investment that is permitted under the Senior Secured Facilities Documentation (so long as such non-core assets do not represent more than 35% of the applicable acquisition or investment), (iv) other asset
sales so long as (a) such sales or dispositions are for fair market value, (b) at least 75% of the consideration for asset sales and dispositions in excess of a dollar amount to be agreed shall consist of cash or cash equivalents (including
a basket in an amount to be agreed for non-cash consideration that may be designated as cash consideration and subject to additional exceptions to be agreed) and (c) such asset sale or disposition is subject to the terms set forth in the
section entitled “Mandatory Prepayments” hereof, (v) asset sales pursuant to a general basket in an amount per fiscal year to be agreed, (vi) asset sales and transfers among the Borrower and its restricted subsidiaries, and (vii) other
customary exceptions and exceptions consistent with the Documentation Principles;
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(e) dividends and other payments in respect of capital stock, which shall permit, among other things, (i) using the Available Amount Basket, (ii) a general basket in an amount up to the greater of (x) $259
million and (y) 50% of Consolidated EBITDA (the “General RP Basket”) (which may be reallocated to the General Investment Basket or the General Junior Debt Prepayment Basket), (iii) dividends and other payments subject to (x) the Total Net
Leverage Ratio of the Borrower being not more than 1.0x inside the Closing Date Total Net Leverage Ratio and (y) no continuing event of default and (iv) other customary exceptions and exceptions consistent with the Documentation Principles;
(f) acquisitions, investments, loans and advances, which shall permit, among other things, (i) using the Available Amount Basket, (ii) a general basket in an amount up to the greater of (x) $233 million and
(y) 45% of Consolidated EBITDA (the “General Investment Basket”), (iii) acquisitions and other investments subject to the Total Net Leverage Ratio of the Borrower being not more than 0.5x inside the Closing Date Total Net Leverage Ratio,
(iv) Permitted Acquisitions, (v) investments in joint ventures and unrestricted subsidiaries in an aggregate amount up to the greater of (x) $129 million and (y) 25% of Consolidated EBITDA, (vi) unlimited intercompany investments among the
Borrower and its restricted subsidiaries and (vii) other customary exceptions and exceptions consistent with the Documentation Principles;
(g) prepayments (other than permitted refinancings) of payment subordinated debt, which shall permit, among other things, (i) using the Available Amount Basket, (ii) a general basket in an amount not to
exceed the greater of (x) $259 million and (y) 50% of Consolidated EBITDA (the “General Junior Debt Prepayment Basket”) (which may be reallocated to the General Investment Basket), (iii) prepayments subject to the Total Net Leverage Ratio
of the Borrower being not more than 1.0x inside the Closing Date Total Net Leverage Ratio and (iv) other customary exceptions and exceptions consistent with the Documentation Principles;
(h) transactions with affiliates (with exceptions consistent with the Documentation Principles);
(i) changes in fiscal periods without the consent of the Administrative Agent (such consent not to be unreasonably withheld, conditioned or delayed);
(j) negative pledge clauses;
(k) clauses restricting subsidiary distributions;
(l) material changes in lines of business without the consent of the Administrative Agent (such consent not to be unreasonably withheld, conditioned or delayed); and
(m) use of proceeds in direct violation of anti-corruption, bribery and sanctions laws.
The Senior Secured Facilities Documentation shall contain an “Available Amount Basket”, which will include a starter amount of the greater of (x) $155 million and (y) 30% of Consolidated EBITDA and be built
by 50% of cumulative Consolidated Net Income since the first day of the fiscal quarter in which the Closing Date occurs, declined prepayments and other customary amounts and may be used for (i) investments, (ii) restricted payments (subject
to no payment or bankruptcy event of default) or (iii) prepayments of subordinated debt.
With respect to all debt, liens, investments and restricted payments covenants, all amounts incurred under any basket may be reclassified within the same covenant, in whole or in part, by the Borrower to
another basket at any time.
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Unrestricted Subsidiaries:
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The Senior Secured Facilities Documentation will contain provisions pursuant to which, subject to limitations to be agreed consistent with the Documentation Principles, the Borrower will be permitted to
designate or re-designate any existing or subsequently acquired or organized subsidiary as an “unrestricted subsidiary” and subsequently re-designate any such unrestricted subsidiary as a restricted subsidiary. Unrestricted subsidiaries
will not be subject to the mandatory prepayments, representations and warranties, affirmative or negative covenants or event of default provisions of the Senior Secured Facilities Documentation. There will be no requirement to redesignate
an unrestricted subsidiary as a restricted subsidiary. Notwithstanding anything to the contrary, (i) the Borrower and restricted subsidiaries will not be permitted to transfer any materially intellectual property to an Unrestricted
Subsidiary, (ii) no restricted subsidiary that owns material intellectual property can be designated as an Unrestricted Subsidiary and (iii) no Unrestricted Subsidiary shall own material intellectual property.
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Events of Default:
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Consistent with the Documentation Principles, and limited to the following (and with exceptions, materiality and other qualifications to be set forth in the Senior Secured Facilities Documentation):
nonpayment of principal when due; nonpayment of interest, fees or other amounts after five business days; material inaccuracy of a representation or warranty when made (subject to 30-day cure period, so long as such breach would not
reasonably be expected to have a Material Adverse Effect); violation of a covenant (subject, in the case of certain affirmative covenants, to a 30-day cure period after notice); cross-default and cross-acceleration to material indebtedness
(subject to a materiality threshold of $100 million); bankruptcy events of the Borrower or its material restricted subsidiaries; certain ERISA events that would reasonably be expected to result in a Material Adverse Effect; material
judgments (subject to a materiality threshold of $100 million and to the extent such judgments remain unsatisfied within 60 days of entry); actual or asserted invalidity by any Loan Party of any material guarantee, security document or
subordination provisions or intercreditor or non-perfection of any security interests with respect to a material portion of the Collateral; and a change of control.
Notwithstanding the foregoing, a breach of the Financial Maintenance Covenant shall not constitute a default or an Event of Default with respect to the Term Loan Facility or trigger a cross-default (but may
trigger cross-acceleration) under the Term Loan Facility until 30 consecutive days after the first date on which the Revolving Loans and Revolving Credit Facility commitments (if any) could have been accelerated or terminated by a vote of
the Revolving Lenders holding at least a majority of the Revolving Loans and Revolving Credit Facility commitments and at the end of each such consecutive 30-day period, the Revolving Lenders holding at least a majority of the Revolving
Loans and Revolving Credit Facility commitments have actually accelerated or terminated the Revolving Loans and Revolving Credit Facility commitments.
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Voting:
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Amendments and waivers with respect to the Senior Secured Facilities Documentation shall require the approval of Lenders holding more than 50% of the aggregate amount of the loans and commitments under the
Senior Secured Facilities (the “Required Lenders”), except that (a) the consent of each Senior Secured Lender directly affected thereby shall be required with respect to (i) reductions in the amount or extensions of the scheduled date of
any amortization or final maturity of any Loan, (ii) reductions in the rate of interest or any fee or extensions of any due date thereof, (iii) increases in the amount or extensions of the expiry date of any Senior Secured Lender’s
commitment and (iv) modifications to the pro rata sharing and payment waterfall provisions; (b) the consent of 100% of the Senior Secured Loan Lenders shall be required with respect to (i) reductions of any of the voting percentages, (ii)
releases of all or substantially all of the collateral and (iii) releases of all or substantially all of the Guarantors; and (c) under the Revolving Credit Facility, customary protections for the Issuing Banks will be provided with respect
to any amendment that modifies Letter of Credit specific provisions. Any amendment or waiver required to permit a transaction providing for the subordination of any Senior Secured Lender’s right to payment or to the Liens securing any
obligations owed to any Senior Secured Lender (in its capacity as such) shall require the consent of each affected Senior Secured Lender.
Notwithstanding the foregoing, only Revolving Lenders holding at least a majority of the loans and commitments under the Revolving Credit Facility shall have the ability to amend the Financial Maintenance
Covenant (and any financial definition related thereto), exercise remedies with respect to the Financial Maintenance Covenant and waive a breach of the Financial Maintenance Covenant.
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Assignments and Participations:
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After the Closing Date, the Senior Secured Lenders shall be permitted to assign (other than to a natural person or to Disqualified Institutions) all or a portion of their Loans and commitments with the
consent, not to be unreasonably withheld, of (a) the Borrower, unless (i) the assignee is a Senior Secured Lender, an affiliate of a Senior Secured Lender or an approved fund or (ii) a payment or bankruptcy event of default has occurred and
is continuing, provided such consent shall be deemed given if the Borrower has not responded within 10 business days following notice, (b) the Administrative Agent,
unless a Loan is being assigned to a Senior Secured Lender, an affiliate of a Senior Secured Lender or an approved fund and (c) solely with respect to Revolving Credit Facility commitments, each Issuing Lender. In the case of a
partial assignment (other than to another Senior Secured Lender, an affiliate of a Senior Secured Lender or an approved fund), the minimum assignment amount shall be $1,000,000 for Term Loan and $5,000,000 for Revolving Credit Facility
commitments unless otherwise agreed by the Borrower and the Administrative Agent. The Administrative Agent shall receive a processing and recordation fee of $3,500 in connection with each assignment. The Senior Secured Lenders shall also
be permitted to sell participations in their Loans and commitments. Participants shall have the same benefits as the selling Senior Secured Lenders with respect to yield protection and increased cost provisions, subject to customary
limitations. Voting rights of a participant shall be limited to those matters set forth in clause (a) of the preceding paragraph with respect to which the affirmative vote of the Senior Secured Lender from which it purchased its
participation would be required. Pledges of Loans in accordance with applicable law shall be permitted without restriction.
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 foregoing provisions
relating to Disqualified Institutions. Without limiting the generality of the foregoing, the Administrative Agent, in its capacity as such, shall not (a) be obligated to ascertain, monitor or inquire as to whether any Senior Secured lender
or participant or prospective Senior Secured Lender or participant is a Disqualified Institution or (b) have any liability with respect to or arising out of any assignment or participation of loans, or disclosure of confidential information
in connection therewith, to any Disqualified Institution; it being agreed that the foregoing shall not relieve the Administrative Agent, to the extent constituting a Senior Secured Lender, from its obligations in respect of Disqualified
Institutions in connection with assignments and participations, and disclosure of confidential information in connection therewith, by it to the extent acting in its capacity as a Senior Secured Lender. For the avoidance of doubt, the
Administrative Agent may share the list of Disqualified Institutions with any Senior Secured Lender or potential assignee upon request.
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Taxes and Reserve Requirements:
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Customary for financing facilities and transactions of this type and consistent with the Documentation Principles.
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Indemnities and Expenses:
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The Senior Secured Facilities Documentation will provide customary and appropriate provisions relating to indemnity, expenses and related matters in a form reasonably satisfactory to the Lead Arranger, the
Administrative Agent and the Borrower and consistent with the Documentation Principles.
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Replacement of Lenders:
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Consistent with the Documentation Principles the Senior Secured Facilities Documentation shall contain customary provisions for replacing non-consenting Senior Secured Lenders in connection with amendments
and waivers requiring the consent of all Senior Secured Lenders or of all Senior Secured Lenders directly affected thereby so long as the Required Lenders of the aggregate amount of the Loans shall have consented thereto.
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Governing Law and Jurisdiction:
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The Senior Secured Facilities Documentation will be governed by New York law and will provide that the parties will submit to the exclusive jurisdiction (except as to matters governing security and
perfection) and venue of the federal and state courts of the State of New York sitting in the Borough of Manhattan and will waive any right to trial by jury.
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Counsel to the Administrative Agent and Lead Arranger:
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Cahill Gordon & Reindel LLP
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Counsel to Borrower:
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Sullivan & Cromwell LLP
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Interest Rate Options: |
The Borrower may elect that the Term Loans and Revolving Loans comprising each borrowing bear interest at a rate per annum equal to (a) the ABR plus the Applicable Margin or (b) the Eurodollar Rate, plus the Applicable Margin.
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Interest Payment Dates: |
In the case of ABR Loans, quarterly in arrears, on the first day of each calendar quarter.
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Default Rate: |
At any time when there is a payment or bankruptcy default, after giving effect to any applicable grace period, overdue amounts shall bear interest at 2.00% per annum above the rate otherwise applicable thereto (or, in the event there
is no applicable rate, 2.00% per annum in excess of the rate otherwise applicable to Term Loans maintained as ABR Loans from time to time).
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Commitment Fees: |
Commencing on the Closing Date, a commitment fee of 0.50% per annum shall be payable on the actual daily unused portions of the Revolving Credit Facility (reduced by the amount of Letters of Credit issued and outstanding), such fee to
be payable quarterly in arrears and on the date of termination or expiration of the commitments; provided that such commitment fee will be subject to one 12.5 basis point step-down at a First Lien
Net Leverage Ratio to be agreed.
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Letter of Credit Fees: |
A fee equal to (i) the Applicable Margin then in effect for Eurodollar Loans under the Revolving Credit Facility, times (ii) the average daily maximum aggregate amount available to be drawn under all Letters of Credit, will be payable
quarterly in arrears to the Revolving Lenders. In addition, a fronting fee in an amount not to exceed 0.125% per annum, to be agreed upon between the Issuing Bank and Borrower, will be payable to the Issuing Bank, as well as certain
customary fees assessed thereby.
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Rate and Fee Basis: |
All per annum rates shall be calculated on the basis of a year of 360 days (or 365/366 days, in the case of ABR Loans the interest rate payable on which is then based on the Prime Rate) for actual days elapsed.
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Borrower:
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Gibraltar Acquisition Holdings LLC (the “Borrower”).
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Guarantors:
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Same as Senior Secured Facilities.
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Bridge Lenders:
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JPMCB, BNP, DBCI, Citi, Mizuho, HSBC Bank and TD and, together with the other financial institutions selected by the Lead Arrangers and consented to by the Borrower (such consent not to be unreasonably
withheld, delayed or conditioned) to become lenders, the “Bridge Lenders”), other than Disqualified Institutions.
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Amount of Bridge Loans:
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$955 million (less the aggregate gross proceeds of Notes or Securities issued on or before the Closing Date) in aggregate principal amount of unsecured increasing rate loans (the “Bridge Loans”).
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Purpose:
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The proceeds of the Bridge Loans, together with the cash in hand and the proceeds from any Notes, on the Closing Date will be used by the Borrower to finance the Transactions.
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Availability:
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The full amount of the Bridge Facility must be drawn in a single drawing on the Closing Date. Amounts borrowed under the Bridge Facility that are repaid or prepaid may not be reborrowed.
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Ranking:
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The Bridge Loans and guarantees thereof will constitute senior unsecured indebtedness of the Loan Parties, and will rank pari passu in right of payment with all
obligations under the senior notes and other senior indebtedness of the borrower.
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Closing Date:
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The date the Acquisition is consummated.
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Maturity:
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364 days from the date of the making of the Bridge Loans (the “Maturity Date”). If, upon the Maturity Date, the Bridge Loans have not been previously repaid in full, the Bridge Loans will be automatically
converted into term loans (each, an “Exchange Loan”) due on the 8-year anniversary of the Closing Date, subject, only to no bankruptcy or payment event of default. At any time on or after the Maturity Date (any such date, the “Conversion
Date”), and no more than one time per calendar month occurring thereafter, at the option of the applicable Bridge Lender, the Exchange Loans may be exchanged in whole or in part for exchange notes (the “Exchange Notes”) having an equal
principal amount; provided that no Exchange Notes shall be issued until the Borrower shall have received requests to issue at least $200 million in aggregate principal amount of the applicable
tranche of Exchange Notes.
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The Exchange Loans will be governed by the provisions of the Bridge Documentation and will have the same terms as the Bridge Loans except as expressly set forth on Annex I to this Exhibit C. Each tranche of
the Exchange Notes will be issued pursuant to an Indenture that will have the terms set forth on Annex I to this Exhibit C.
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Interest Rate:
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The Bridge Loans will initially bear interest at a rate per annum equal to the sum of LIBOR, plus the Spread, calculated on the basis of the actual number of days
elapsed in a year of 360 days. The “Spread” will initially equal 6.25%. If the Bridge Loans are not repaid in whole within 90 days following the Closing Date, the Spread will increase by 50 basis points at the end of such 90-day period and
will increase by an additional 50 basis points at the end of each 90-day period thereafter; provided that at no time shall the interest rate in effect on the Bridge Loans exceed the applicable Total
Cap (as defined in the Fee Letter) (in each case, excluding interest at the Default Rate described below but taking into consideration all OID and upfront fees).
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Interest will be payable in arrears on the last day of the applicable interest period relating thereto; provided that in the event that the interest period for a
LIBOR rate loan shall be for a period in excess of three months, then interest shall also be payable on each three month anniversary of the commencement of such interest period.
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As used herein, the term “LIBOR” means (as adjusted for statutory reserve requirements for eurodollar liabilities (if any)) the rate for U.S. Dollar deposits in the London interbank market for a period of one
or three months, in each case as selected by the Borrower, appearing on the page of the Reuters Screen which displays the London interbank offered rate for U.S. Dollar deposits administered by ICE Benchmark Administration Limited (such page
currently being the LIBOR01 page or such other commercially available source providing quotations of LIBOR as may be designated by the Administrative Agent from time to time); provided that, with
respect to the Bridge Facility, in no event will LIBOR (or its replacement) be less than 0.50%. The basis for calculating accrued interest and the interest periods for loans bearing interest by reference to LIBOR shall be customary and
appropriate for financings of this type. Amounts not paid when due will accrue at a rate equal to the applicable rate set forth above, plus an additional two percentage points (2.00%) per annum (the “Default Rate”) and will be payable on demand.
The Bridge Documentation will contain customary “hardwired” provisions with respect to a replacement of LIBOR.
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Funding Protection:
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Subject to Documentation Principles (as defined below), substantially the same as and limited to those set forth in the Senior Secured Facilities.
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Mandatory Prepayments:
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With customary exceptions and baskets to be agreed and consistent with the Documentation Principles, the net cash proceeds to the Borrower or any restricted subsidiary from (a) the issuance of the Notes and
the issuance of any other long-term indebtedness not in the ordinary course by the Borrower or any of its restricted subsidiaries; provided that in the event any Lender or affiliate of a Lender
purchases debt securities from the Borrower pursuant to a securities demand at a price above the level at which such Lender or affiliate has reasonably determined such debt securities can be resold by such Lender or affiliate to a bona fide
third party at the time of purchase (and notifies the Borrower thereof) the net cash proceeds received by the Borrower in respect of such debt securities may, at the option of such Lender or affiliate, be applied first to prepay the Bridge
Loans of such Lender or affiliate, prior to being applied to prepay the Bridge Loans held by other Lenders and (b) any non-ordinary course asset sale or casualty event (subject to baskets, reinvestment rights, repayment of secured debt and
pro rata repayment of pari passu debt), will be used to repay the Bridge Loans, subject to the required prior repayment of any amount outstanding under the Senior Secured Facilities, in each case,
at 100% of the principal amount of the Bridge Loans prepaid plus accrued interest to the date of prepayment.
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Optional Prepayment:
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The Bridge Loans may be prepaid, in whole or in part, at the option of the Borrower at any time upon three business days’ written notice at a price equal to 100% of the principal amount thereof plus accrued
and unpaid interest to the date of redemption.
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Documentation Principles:
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The definitive documentation for the Bridge Facility (the “Bridge Documentation”) will be based on the documentation for the Senior Secured Facilities solely with such modifications as are required to reflect
the terms and conditions set forth in this Exhibit C and to reflect the interim nature of the Bridge Facility and the fact that the Bridge Facility is an unsecured credit facility. The Bridge Documentation shall contain only those
conditions to borrowing, mandatory prepayments, representations and warranties, affirmative and negative covenants and events of default expressly set forth in this Exhibit C which shall be substantially consistent with but no less
favorable to the Borrower in any respect than the Senior Secured Facilities, with adjustments to reflect the unsecured nature of the Bridge Facility (the principles set forth in this paragraph, for purposes of this Exhibit C, the
“Documentation Principles”).
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Representations and Warranties:
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Subject to Documentation Principles, substantially the same as and limited to those set forth in the Senior Secured Facilities, subject to the Limited Conditionality Provisions.
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Financial Covenants:
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None.
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Affirmative Covenants:
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Subject to Documentation Principles, substantially the same as and limited to those set forth in the Senior Secured Facilities (and a customary securities demand covenant).
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Negative Covenants:
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Subject to Documentation Principles, substantially the same as and limited to those set forth in the Senior Secured Facilities.
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Events of Default:
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Subject to Documentation Principles, substantially the same as and limited to those set forth in the Senior Secured Facilities, except there will be cross-acceleration and cross-payment default to material
indebtedness.
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Conditions Precedent to Borrowing:
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The several obligations of the Bridge Lenders to make, or cause one of their respective affiliates to make, Bridge Loans will be subject only to closing conditions expressly set forth on Exhibit D to the
Commitment Letter, subject to the Limited Conditionality Provisions.
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Transferability:
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After the Closing Date, the Bridge Lenders will be permitted to assign Bridge Loans (other than to Disqualified Institutions or natural persons) with the consent of the Borrower (not to be unreasonably
withheld, delayed or conditioned); provided that no consent of the Borrower shall be required (i) after the occurrence and during the continuance of a payment or bankruptcy event of default; (ii) if
after giving effect to such assignment, the initial Bridge Lenders continue to hold a majority of the Bridge Loans then outstanding or (iii) upon the occurrence of a Demand Event Failure (as defined in the Fee Letter). For any assignment
for which the Borrower’s consent is required, such consent shall be deemed to have been given if the Borrower has not responded within 10 business days of a request for such consent.
Each of the Bridge Lenders will be free to sell participations in all or any part of the Bridge Loans, once funded, to any third party (other than to Disqualified Institutions or natural persons). Voting
rights of participants shall be limited to matters in respect of (a) reductions of principal, interest or fees of the commitments participated to such participants, (b) extensions of final maturity of the Bridge Loans, (c) releases of all
or substantially all the guarantors and (d) changes in voting thresholds.
Notwithstanding the foregoing, assignments (and, to the extent the Disqualified Institutions list is made available to all Lenders, participations; provided that
regardless of whether the Disqualified Institutions list has been made available to all Lenders, no Lender may sell participations in loans or commitments to Disqualified Institutions without the consent of the Borrower if the Disqualified
Institution list has been made available to such Lender) shall not be permitted to Disqualified Institutions (the list of which may be updated from time to time after the Closing Date with respect to competitors of the Borrower and will
remain on file with the Administrative Agent and not be subject to further disclosure); provided that the foregoing shall not apply retroactively to disqualify any assignment or participation interest in the Bridge Facilities to the extent
such assignment or participation interest was acquired by a party that was not a Disqualified Institution at the time of such assignment or participation, as the case may be; provided, further that the Administrative Agent shall have no
duties or responsibilities for monitoring or enforcing prohibitions on assignments or participations to Disqualified Institutions. Any assigning Lender shall, in connection with any potential assignment, provide to the Borrower a copy of
its request (including the name of the prospective assignee) concurrently with its delivery of the same request to the Administrative Agent irrespective of whether or not an Event of Default relating to payment default or bankruptcy has
occurred and is continuing or whether the Borrower otherwise has a consent right.
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Modification of the Bridge Loans:
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Modification of the Bridge Loans may be made with the consent of Bridge Lenders holding greater than 50% of the affected tranche (or tranches) of Bridge Loans then outstanding (the “Required Bridge Lenders”),
except that no modification or change may extend the maturity of any Bridge Loan or extend the time of payment of interest on any Bridge Loan, reduce the rate of interest or the principal amount of any Bridge Loan, change the pro rata
sharing and payment provisions in a manner that would adversely affect the holders of the Bridge Loans, change the ability to convert the Bridge Loans into Exchange Notes, release all or substantially all of the value of the guarantees
provided by the Guarantors or reduce the percentage of holders necessary to modify or change the Bridge Loans, without the consent of Bridge Lenders holding 100% of the tranche of Bridge Loans affected thereby.
The Bridge Documentation shall contain provisions allowing the Borrower to replace a Bridge Lender in connection with amendments and waivers requiring the consent of all Bridge Lenders or of all Bridge
Lenders directly affected thereby (so long as the Required Bridge Lenders consent), increased costs, taxes, etc.
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Taxes, Reserve Requirements, Expenses and Indemnities:
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Subject to Documentation Principles, substantially the same as and limited to those set forth in the Term Loan Facility.
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Governing Law and Jurisdiction:
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The Bridge Documentation will be governed by New York law and will provide that the parties will submit to the exclusive jurisdiction and venue of the federal and state courts of the State of New York sitting
in the Borough of Manhattan and will waive any right to trial by jury.
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Maturity:
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The Exchange Loans will mature on the eighth anniversary of the Closing Date.
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Interest Rate:
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The Exchange Loans will bear interest at a rate per annum equal to the Total Cap (as defined in the Fee Letter).
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Notwithstanding the foregoing, after the occurrence and during the continuance of a payment or bankruptcy event of default, interest will accrue on all overdue amounts under the Exchange Loans at the
then-applicable rate plus an additional two percentage points (2.00%) per annum. Interest will be payable in arrears at the end of each interest period and on the maturity date of the Exchange Loans.
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Covenants, Defaults and Offers to Repurchase:
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Upon and after the conversion into Exchange Loans, the covenants, offers to repurchase and defaults that would be applicable to the Exchange Notes, if issued, will also be applicable to the Exchange Loans in lieu of the corresponding
provisions of the Bridge Documentation.
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Maturity Date:
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The Exchange Notes will mature on the eighth anniversary of the Closing Date.
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Interest Rate:
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Each Exchange Note will bear interest at a rate per annum equal to the Total Cap.
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Optional Redemption:
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Exchange Notes will be non-callable (subject to the make-whole and equity clawback exceptions in the succeeding paragraphs below) until the third anniversary of the Closing Date. Thereafter, each Exchange
Note will be callable at par plus accrued interest plus a premium equal to 50% of the coupon in year 4, which premium will decline ratably on each yearly anniversary of the Closing Date to zero in year 6.
Notwithstanding the foregoing, any Exchange Notes received by the Commitment Parties or their respective affiliates (other than Asset Management Affiliates (as defined in the Fee Letter)) in exchange for
Exchange Loans made by such Commitment Parties may be optionally redeemed on a non-pro rata basis at a redemption price equal to par plus accrued and unpaid interest so long as such Exchange Notes are held by such Commitment Parties or
their respective affiliates (other than Asset Management Affiliates); provided that this provision will not apply to Exchange Notes acquired in bona fide open market purchases from third parties or
in market making activities.
Before the third anniversary of the Closing Date, Borrower may redeem such Exchange Notes at a make-whole price based on U.S. Treasury notes with a maturity closest to the third anniversary of the Closing
Date plus 50 basis points.
In addition, prior to the third anniversary of the Closing Date, up to 40% of the original principal amount of the Exchange Notes may be redeemed from the proceeds of a qualifying equity offering by the
Borrower or a subsidiary of the Borrower.
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Defeasance and Satisfaction and Discharge Provisions of Exchange Notes:
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Customary for high yield indentures.
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Amendments:
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Customary for high yield indentures.
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Change of Control:
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101%.
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Covenants:
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The Indenture will include covenants similar as are customary for high yield debt securities.
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Events of Default:
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The Indentures will include events of default as are customary for high yield debt securities.
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a. |
The fair value of the assets of Holdings and its subsidiaries, on a consolidated basis, exceeds, on a consolidated basis, their debts and liabilities, subordinated, contingent or otherwise;
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b. |
The present fair saleable value of the property of Holdings and its subsidiaries, on a consolidated basis, is greater than the amount that will be required to pay the probable liability, on a consolidated basis, of their debts and other
liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured;
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c. |
Holdings and its subsidiaries, on a consolidated basis, are able to pay their debts and liabilities, subordinated, contingent or otherwise, as such liabilities become absolute and matured; and
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d. |
Holdings and its subsidiaries, on a consolidated basis, are not engaged in, and are not about to engage in, business for which they have unreasonably small capital.
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GIBRALTAR MIDCO HOLDINGS LLC
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By:
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Name:
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Title:
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