UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




FORM 8-K


CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of earliest event reported):

December 3, 2014 (December 3, 2014)




COPART, INC.

(Exact name of registrant as specified in its charter)


Delaware

0-23255

94-2867490

(State or other jurisdiction of
incorporation)

(Commission File Number)

(IRS Employer
Identification No.)


14185 Dallas Parkway, Suite 300

Dallas, Texas 75254

 (Address of principal executive offices, including zip code)


(972) 391-5000

(Registrant’s telephone number, including area code)


Not Applicable

(Former name or former address, if changed since last report.)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

[  ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[  ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[  ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[  ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))




Item 1.01

Entry Into Material Definitive Agreements.


On December 3, 2014, Copart, Inc. (“Copart”) entered into a Credit Agreement (as defined below) with respect to a secured revolving loan facility in an aggregate principal amount of up to $300.0 million, none of which was drawn at closing, and a secured term loan facility in an aggregate principal amount of $300.0 million, all of which was drawn at closing. In addition, Copart issued an aggregate of $400.0 million of senior secured notes in four separate $100.0 million tranches bearing interest rates ranging from 4.07% to 4.35% and having maturity dates ranging from December 2024 through December 2029.


The principal purposes of these financing transactions were to refinance existing bank indebtedness that is due within one year (as described in Item 1.02 below); to increase the size and availability under the company’s revolving facility; and to provide additional long-term financing at fixed interest rates. The company repaid the full balance of existing indebtedness under the Credit Facility dated as of December 14, 2010. Any excess proceeds will be used for general corporate purposes, including working capital and capital expenditures as well as potential share repurchases, acquisitions, or other investments relating to Copart’s growth strategies in domestic and international markets.

Credit Agreement

On December 3, 2014, Copart entered into a Credit Agreement (the “Credit Agreement”), by and among Copart, the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as administrative agent.

The Credit Agreement provides for (a) a secured revolving loan facility in an aggregate principal amount of up to $300.0 million, none of which was drawn at closing, and (b) a secured term loan facility in an aggregate principal amount of $300.0 million, which was fully drawn at closing. Unless an earlier payment event occurs (as specified below), the revolving credit facility and the term loan facility mature on December 3, 2019.

The Credit Agreement permits Copart to add one or more incremental term loan facilities and/or increase the commitments for revolving loans in an aggregate principal amount of up to the greater of $250.0 million or 2.5 times EBITDA. In addition, up to $50.0 million of the commitments under the revolving credit facility may be used for swingline loans and up to $35.0 million of the revolving commitments may be used for the issuance of letters of credit.

The revolving and term loans under the Credit Agreement bear interest, at the election of Copart, at either (a) the base rate (the “Base Rate”), which is defined as a fluctuating rate per annum equal to the greatest of (A) the prime rate in effect on such day, (B) the federal funds rate in effect on such date plus 0.50%, and (C) an adjusted LIBOR rate determined on the basis of a one-month interest period plus 1.0%, in each case plus an applicable margin ranging from 0.25% to 1.0% based on Copart’s consolidated total net leverage ratio during the preceding fiscal quarter or (b) an adjusted LIBOR Rate plus an applicable margin ranging from 1.25% to 2.0% depending on Copart’s consolidated total net leverage ratio during the preceding fiscal quarter. Swingline loans, if any, shall bear interest at the Base Rate plus an applicable margin ranging from 0.25% to 1.0% depending on Copart’s consolidated total net leverage ratio during the preceding fiscal quarter. Interest is due and payable quarterly in arrears for loans bearing interest at the Base Rate and at the end of an interest period (or at each three month interval in the case of loans with interest periods greater than three months) in the case of loans bearing interest at the adjusted LIBOR rate. The aggregate outstanding principal amount of the term loan is payable in quarterly installments commencing December 31, 2014 in accordance with a payment schedule set forth in the Credit Agreement. Copart is also obligated to pay a commitment fee, at a per annum rate ranging from 0.20% to 0.35% depending on Copart’s consolidated total net leverage ratio during the preceding fiscal quarter, on the average daily unused portion of the revolving credit commitment under the Credit Agreement. Copart is also required to pay other customary closing fees, arrangement fees, and administration fees.

To the extent that any standby letters of credit are issued under the Credit Agreement for the account of Copart, Copart will pay a letter of credit commission with respect to such letters of credit in an amount equal to the daily amount available to be drawn under such letters of credit multiplied by the applicable margin for LIBOR rate loans. The letter of credit commission is payable quarterly in arrears. Copart will also pay an issuance fee and other



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customary fees and costs in connection with the issuance of letters of credit under the Credit Agreement.

The commitments under the revolving credit facility will terminate, and all outstanding amounts thereunder will be due and payable, on the earliest of (a) December 3, 2019, (b) the date of termination of the entire revolving credit commitment pursuant to the Credit Agreement by Copart, and (c) the occurrence of an event of default and acceleration of the revolving credit obligations. The term loan will be due and payable on the earliest of (a) December 3, 2019 and (b) the occurrence of an event of default and acceleration of the term loan obligations. Copart may prepay the term loan or revolving loans or reduce the revolving credit commitment, in whole or in part, at any time and without premium or penalty, subject to certain conditions including minimum amounts and reimbursement of certain costs in the case of prepayments of LIBOR rate loans. Amounts repaid or prepaid under the revolving credit facility may be reborrowed. Term loans that are repaid or prepaid may not be reborrowed.

Copart’s obligations under the Credit Agreement are guaranteed by certain of its domestic subsidiaries meeting materiality thresholds set forth in the Credit Agreement. Such obligations, including the guaranties, are secured by substantially all of the assets of Copart and the subsidiary guarantors pursuant to a Security Agreement, dated December 3, 2014, among Copart, the subsidiary guarantors from time to time party thereto, and Wells Fargo Bank, National Association, as collateral agent (the “Security Agreement”). The obligations of Copart and its subsidiary guarantors under the Credit Agreement will be treated on a pari passu basis with the obligations of those entities under the Note Purchase Agreement and the Senior Secured Notes (each, as defined below) as well as certain permitted Additional Pari Passu Debt (as defined in the Credit Agreement).

Copart is required to make mandatory prepayments of the outstanding principal amount of the term loans with the net cash proceeds from the sale of certain assets and the receipt of insurance proceeds upon certain insurance and condemnation events, in each case to the extent that such proceeds are not reinvested in assets of Copart or its subsidiaries. Copart is also required to make mandatory prepayments of the outstanding principal amount of the terms loans with the net cash proceeds from the incurrence of indebtedness not otherwise permitted under the Credit Agreement.

The Credit Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict Copart and its subsidiaries’ ability to, among other things, incur indebtedness, grant liens, merge or consolidate, dispose of assets, make investments, make acquisitions, enter into transactions with affiliates, pay dividends, or make distributions on and repurchase stock, in each case subject to certain exceptions. Copart is also required to maintain compliance, measured at the end of each fiscal quarter, with a consolidated total net leverage ratio and a consolidated interest coverage ratio.

The Credit Agreement contains customary events of default that include, among other things, payment defaults, inaccuracy of representations and warranties, covenant defaults, cross defaults with respect to material indebtedness and defaults under the Note Purchase Agreement and Senior Notes (each, as defined below), bankruptcy and insolvency defaults, material judgment defaults, ERISA defaults, and a change of control default. The occurrence of an event of default could result in the acceleration of the obligations under the Credit Agreement. Under certain circumstances, a default interest rate will apply on all obligations during the existence of an event of default under the Credit Agreement at a rate equal to (a) for Base Rate loans, 2.0% above the applicable interest rate for Base Rate loans and (b) for LIBOR rate loans, 2.0% above the applicable interest rate for LIBOR rate loans until the end of the applicable interest period and, thereafter, at a rate equal to 2.0% above the applicable interest rate for Base Rate loans.

Certain of the lenders under the Credit Agreement and their affiliates have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with Copart or Copart’s affiliates. The lenders and their affiliates have received, or may in the future receive, customary fees and commissions for these transactions.

The foregoing descriptions of the Credit Agreement and the Security Agreement do not purport to be complete and are qualified in their entirety by reference to the Credit Agreement and the Security Agreement, which are filed as Exhibits 10.1 and 10.2, respectively, hereto and are incorporated by reference herein.



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Note Purchase Agreement


On December 3, 2014, Copart entered into a Note Purchase Agreement (the “Note Purchase Agreement”) to sell to certain purchasers (collectively, the “Purchasers”) $400.0 million in aggregate principal amount of senior secured notes (the “Senior Secured Notes”) consisting of (a) $100 aggregate principal amount of 4.07% Senior Notes, Series A, due December 3, 2024, (b) $100.0 aggregate principal amount of 4.19% Senior Notes, Series B, due December 3, 2026, (c) $100.0 aggregate principal amount of 4.25% Senior Notes, Series C, due December 3, 2027, and (d) $100.0 aggregate principal amount of 4.35% Senior Notes, Series D, due December 3, 2029.

Copart may prepay the Senior Secured Notes, in whole or in part, at any time, subject to certain conditions including minimum amounts and payment of a make-whole amount equal to the discounted value of the remaining scheduled interest payments under the Senior Secured Notes. Copart may also be required to prepay the Senior Secured Notes, in whole or in part, upon the occurrence of certain events, including certain asset dispositions, insurance and condemnation events, and changes of control.

Copart’s obligations under the Note Purchase Agreement are guaranteed by certain of its domestic subsidiaries meeting materiality thresholds set forth in the Note Purchase Agreement. Such obligations, including the guaranties, are secured by substantially all of the assets of Copart and the subsidiary guarantors pursuant to the Security Agreement referenced in this Item 1.01 above. The obligations of Copart and its subsidiary guarantors under the Note Purchase Agreement will be treated on a pari passu basis with the obligations of those entities under the Credit Agreement as well as any Additional Pari Passu Debt (as defined in the Note Purchase Agreement).

The Note Purchase Agreement contains customary affirmative and negative covenants, including covenants that limit or restrict Copart and its subsidiaries’ ability to, among other things, incur indebtedness, grant liens, merge or consolidate, dispose of assets, make investments, make acquisitions, enter into transactions with affiliates, pay dividends, or make distributions and repurchase stock, in each case subject to certain exceptions. Copart is also required to maintain compliance, measured at the end of each fiscal quarter, with a consolidated total net leverage ratio and a consolidated interest coverage ratio.

The Note Purchase Agreement contains customary events of default that include, among other things, payment defaults, inaccuracy of representations and warranties, covenant defaults, cross defaults with respect to material indebtedness, bankruptcy and insolvency defaults, material judgment defaults, and ERISA defaults. The occurrence of an event of default could result in the acceleration of the obligations under the Senior Secured Notes. In the event of acceleration of the obligations under the Senior Secured Notes, Copart would also be required to pay a make-whole fee, any accrued and unpaid Excess Leverage Fee, and all accrued and unpaid interest. Under certain circumstances, a default interest rate will apply on all obligations at a rate equal to the greater of (a) the sum of 2.0% above the applicable interest rate for the notes and, if then applicable, the Excess Leverage Fee and (b) 2.0% above the prime rate.

The foregoing descriptions of the Note Purchase Agreement and the Security Agreement do not purport to be complete and are qualified in their entirety by reference to the Note Purchase Agreement and the Security Agreement, which are filed as Exhibits 10.3 and 10.2, respectively, hereto and are incorporated by reference herein.

Item 1.02 Termination of a Material Definitive Agreement


On December 3, 2014, in connection with Copart’s entry into the Credit Agreement and the Note Purchase Agreement discussed in Item 1.01 of this Current Report, Copart terminated its Credit Facility, dated as of December 14, 2010, by and between Copart and Bank of America, N.A., and repaid the loans outstanding thereunder.



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Item 2.03 Creation of a Direct Financial Obligation Under an Off-Balance Sheet Arrangement of a Registrant.


The information set forth under Item 1.01 of this Current Report is incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities.

As described in Item 1.01 of this Current Report, which is incorporated herein by reference, Copart sold $400 million in aggregate principal amount of Senior Secured Notes to the Purchasers in a private placement pursuant to exemptions from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). Copart offered and sold the Senior Secured Notes to the Purchasers in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act. Copart relied on the exemption from registration based in part on representations made by the Purchasers.

The Senior Secured Notes have not been registered under the Securities Act and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements.


Item 9.01 Financial Statements and Exhibits

 

(d) Exhibits. 

 

 

Exhibit Number       

Description

10.1

Credit Agreement, dated as of December 3, 2014, by and among Copart, Inc., the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as administrative agent

10.2

Security Agreement, dated as of December 3, 2014, by and among Copart, Inc., the subsidiary guarantors from time to time party thereto, and Wells Fargo Bank, National Association, as collateral agent

10.3

Note Purchase Agreement, dated as of December 3, 2014, by and among Copart, Inc. and each of the purchasers listed on Schedule B thereto


Forward Looking Statements


This Current Report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements relating to the use of proceeds of today’s financing. Forward-looking statements involve substantial risks and uncertainties that may cause actual events or results to differ materially from currently anticipated events or results such as Copart’s ability to generate sufficient cash flow to timely service its indebtedness; Copart’s ability to adhere to the negative covenants and restrictions contained in the financing documents; working capital requirements; and the timing and size of any future acquisitions or share repurchases, if any.  In addition, Copart’s business is subject to numerous risks and uncertainties, including, among others, risks relating to vehicle supplier and customer acquisition and maintenance; risks associated with international operations; Copart’s ability to transition to an internally developed proprietary enterprise operating system; and risks associated with online operations, including cyber-attacks and credit card fraud.  Information on these and additional risks, uncertainties, and other information affecting our business and operating results are contained in Copart’s filings with the Securities and Exchange Commission, including risks and uncertainties identified in our Quarterly Report on Form 10-Q for the quarter ended October 31, 2014. You should review these risk factors carefully. All forward-looking statements are expressly qualified in their entirety by this cautionary statement. Copart does not undertake any obligation to publicly update its forward-looking statements based on events or circumstances after the date hereof, except as required by law.



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SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


 

 

COPART, INC.

 

 

 

 

By:   

/s/ Paul A. Styer

 

 

 

Paul A. Styer

Senior Vice President, General Counsel, and Secretary



-6-

Date: December 3, 2014



Exhibit Index

 


 

 

 

 

Exhibit Number

 

Description

10.1

 

Credit Agreement, dated as of December 3, 2014, by and among Copart, Inc., the lenders from time to time party thereto, and Wells Fargo Bank, National Association, as administrative agent

10.2

 

Security Agreement, dated as of December 3, 2014, by and among Copart, Inc., the subsidiary guarantors from time to time party thereto, and Wells Fargo Bank, National Association, as collateral agent

10.3

 

Note Purchase Agreement, dated as of December 3, 2014, by and among Copart, Inc. and each of the purchasers listed on Schedule B thereto



-7-


Published CUSIP Number:__________
Revolving Credit CUSIP Number: __________
Term Loan CUSIP Number: __________

 
 
 

$600,000,000

CREDIT AGREEMENT

dated as of December 3, 2014,

by and among

COPART, INC. ,
as Borrower,

the Lenders referred to herein,
as Lenders,

WELLS FARGO BANK, NATIONAL ASSOCIATION ,
as Administrative Agent,
Swingline Lender and Issuing Lender,

and

 

BANK OF AMERICA, N.A. ,

as Syndication Agent

 

WELLS FARGO SECURITIES, LLC and

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
as Joint Lead Arrangers and Joint Bookrunners

 

 
 
 

 

 

TABLE OF CONTENTS

            Page
ARTICLE I DEFINITIONS
     1    
SECTION 1.1
           
Definitions
         1    
SECTION 1.2
           
Other Definitions and Provisions
         30    
SECTION 1.3
           
Accounting Terms
         30    
SECTION 1.4
           
UCC Terms
         31    
SECTION 1.5
           
Rounding
         31    
SECTION 1.6
           
References to Agreement and Laws
         31    
SECTION 1.7
           
Times of Day
         31    
SECTION 1.8
           
Letter of Credit Amounts
         31    
SECTION 1.9
           
Guarantees
         31    
SECTION 1.10
           
Covenant Compliance Generally
         31    
ARTICLE II REVOLVING CREDIT FACILITY
     32    
SECTION 2.1
           
Revolving Credit Loans
         32    
SECTION 2.2
           
Swingline Loans
         32    
SECTION 2.3
           
Procedure for Advances of Revolving Credit Loans and Swingline Loans
         33    
SECTION 2.4
           
Repayment and Prepayment of Revolving Credit and Swingline Loans
         34    
SECTION 2.5
           
Permanent Reduction of the Revolving Credit Commitment
         35    
SECTION 2.6
           
Termination of Revolving Credit Facility
         36    
ARTICLE III LETTER OF CREDIT FACILITY
     36    
SECTION 3.1
           
L/C Facility
         36    
SECTION 3.2
           
Procedure for Issuance of Letters of Credit
         37    
SECTION 3.3
           
Commissions and Other Charges
         37    
SECTION 3.4
           
L/C Participations
         37    
SECTION 3.5
           
Reimbursement Obligation of the Borrower
         38    
SECTION 3.6
           
Obligations Absolute
         39    
SECTION 3.7
           
Effect of Letter of Credit Application
         39    
SECTION 3.8
           
Resignation of Issuing Lenders
         39    
SECTION 3.9
           
Reporting of Letter of Credit Information and L/C Commitment
         40    
SECTION 3.10
           
Letters of Credit Issued for Subsidiaries
         40    
ARTICLE IV TERM LOAN FACILITY
     40    
SECTION 4.1
           
Initial Term Loan
         40    
 

i


TABLE OF CONTENTS
(continued)

            Page
SECTION 4.2
           
Procedure for Advance of Term Loan
         41    
SECTION 4.3
           
Repayment of Term Loans
         41    
SECTION 4.4
           
Prepayments of Term Loans
         42    
ARTICLE V GENERAL LOAN PROVISIONS
     43    
SECTION 5.1
           
Interest
         43    
SECTION 5.2
           
Notice and Manner of Conversion or Continuation of Loans
         44    
SECTION 5.3
           
Fees
         45    
SECTION 5.4
           
Manner of Payment
         45    
SECTION 5.5
           
Evidence of Indebtedness
         46    
SECTION 5.6
           
Sharing of Payments by Lenders
         47    
SECTION 5.7
           
Administrative Agent’s Clawback
         47    
SECTION 5.8
           
Changed Circumstances
         48    
SECTION 5.9
           
Indemnity
         49    
SECTION 5.10
           
Increased Costs
         49    
SECTION 5.11
           
Taxes
         50    
SECTION 5.12
           
Mitigation Obligations; Replacement of Lenders
         54    
SECTION 5.13
           
Incremental Loans
         55    
SECTION 5.14
           
Cash Collateral
         58    
SECTION 5.15
           
Defaulting Lenders
         59    
ARTICLE VI CONDITIONS OF CLOSING AND BORROWING
     61    
SECTION 6.1
           
Conditions to Closing and Initial Extensions of Credit
         61    
SECTION 6.2
           
Conditions to All Extensions of Credit
         65    
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES
     65    
SECTION 7.1
           
Organization; Power; Qualification
         65    
SECTION 7.2
           
Ownership
         66    
SECTION 7.3
           
Authorization; Enforceability
         66    
SECTION 7.4
           
Compliance of Agreement, Loan Documents and Borrowing with Laws, Etc.
         66    
SECTION 7.5
           
Compliance with Law; Governmental Approvals
         67    
SECTION 7.6
           
Tax Returns and Payments
         67    
SECTION 7.7
           
Intellectual Property Matters
         67    
SECTION 7.8
           
Environmental Matters
         67    
SECTION 7.9
           
Employee Benefit Matters
         68    
 

ii


TABLE OF CONTENTS
(continued)

            Page
SECTION 7.10
           
Margin Stock
         69    
SECTION 7.11
           
Government Regulation
         69    
SECTION 7.12
           
Material Contracts
         69    
SECTION 7.13
           
Employee Relations
         69    
SECTION 7.14
           
Burdensome Provisions
         70    
SECTION 7.15
           
Financial Statements
         70    
SECTION 7.16
           
No Material Adverse Change
         70    
SECTION 7.17
           
Solvency
         70    
SECTION 7.18
           
Title to Properties
         70    
SECTION 7.19
           
Litigation
         70    
SECTION 7.20
           
Anti-Terrorism; Anti-Money Laundering
         71    
SECTION 7.21
           
Absence of Defaults
         71    
SECTION 7.22
           
Senior Indebtedness Status
         71    
SECTION 7.23
           
Disclosure
         71    
SECTION 7.24
           
Compliance with FCPA
         71    
ARTICLE VIII AFFIRMATIVE COVENANTS
     72    
SECTION 8.1
           
Financial Statements and Budgets
         72    
SECTION 8.2
           
Certificates; Other Reports
         73    
SECTION 8.3
           
Notice of Litigation and Other Matters
         74    
SECTION 8.4
           
Preservation of Corporate Existence and Related Matters
         75    
SECTION 8.5
           
Maintenance of Property and Licenses
         75    
SECTION 8.6
           
Insurance
         75    
SECTION 8.7
           
Accounting Methods and Financial Records
         76    
SECTION 8.8
           
Payment of Taxes and Other Obligations
         76    
SECTION 8.9
           
Compliance with Laws and Approvals
         76    
SECTION 8.10
           
Environmental Laws
         76    
SECTION 8.11
           
Compliance with ERISA
         76    
SECTION 8.12
           
[Reserved]
         76    
SECTION 8.13
           
Visits and Inspections
         76    
SECTION 8.14
           
Additional Subsidiaries
         77    
SECTION 8.15
           
Use of Proceeds
         78    
SECTION 8.16
           
Further Assurances
         78    
 

iii


TABLE OF CONTENTS
(continued)

            Page
ARTICLE IX NEGATIVE COVENANTS
     78    
SECTION 9.1
           
Indebtedness
         78    
SECTION 9.2
           
Liens
         80    
SECTION 9.3
           
Investments
         83    
SECTION 9.4
           
Fundamental Changes
         85    
SECTION 9.5
           
Asset Dispositions. Make any Asset Disposition except:
         86    
SECTION 9.6
           
Restricted Payments
         86    
SECTION 9.7
           
Transactions with Affiliates
         87    
SECTION 9.8
           
Accounting Changes; Organizational Documents
         88    
SECTION 9.9
           
Payments and Modifications of Subordinated Indebtedness
         88    
SECTION 9.10
           
No Further Negative Pledges; Restrictive Agreements
         89    
SECTION 9.11
           
Nature of Business
         90    
SECTION 9.12
           
[ Reserved]
         90    
SECTION 9.13
           
Sale Leasebacks
         90    
SECTION 9.14
           
[Reserved]
         90    
SECTION 9.15
           
Financial Covenants
         90    
SECTION 9.16
           
[Reserved]
         90    
SECTION 9.17
           
Disposal of Subsidiary Interests
         90    
ARTICLE X DEFAULT AND REMEDIES
     90    
SECTION 10.1
           
Events of Default
         90    
SECTION 10.2
           
Remedies
         92    
SECTION 10.3
           
Rights and Remedies Cumulative; Non-Waiver; etc.
         93    
SECTION 10.4
           
Crediting of Payments and Proceeds
         94    
SECTION 10.5
           
Administrative Agent May File Proofs of Claim
         95    
SECTION 10.6
           
Credit Bidding
         95    
ARTICLE XI THE ADMINISTRATIVE AGENT AND COLLATERAL AGENT
     96    
SECTION 11.1
           
Appointment and Authority
         96    
SECTION 11.2
           
Rights as a Lender
         96    
SECTION 11.3
           
Exculpatory Provisions
         97    
SECTION 11.4
           
Reliance by the Administrative Agent and/or Collateral Agent
         98    
SECTION 11.5
           
Delegation of Duties
         98    
SECTION 11.6
           
Resignation of Administrative Agent and/or Collateral Agent
         98    
 

iv


TABLE OF CONTENTS
(continued)

            Page
SECTION 11.7
           
Non-Reliance on Administrative Agent and Other Lenders
         99    
SECTION 11.8
           
No Other Duties, Etc.
         100    
SECTION 11.9
           
Collateral and Guaranty Matters
         100    
SECTION 11.10
           
Secured Hedge Agreements and Secured Cash Management Agreements
         101    
ARTICLE XII MISCELLANEOUS
     101    
SECTION 12.1
           
Notices
         101    
SECTION 12.2
           
Amendments, Waivers and Consents
         103    
SECTION 12.3
           
Expenses; Indemnity
         105    
SECTION 12.4
           
Right of Setoff
         107    
SECTION 12.5
           
Governing Law; Jurisdiction, Etc.
         108    
SECTION 12.6
           
Waiver of Jury Trial
         108    
SECTION 12.7
           
Reversal of Payments
         109    
SECTION 12.8
           
Injunctive Relief
         109    
SECTION 12.9
           
Successors and Assigns; Participations
         109    
SECTION 12.10
           
Treatment of Certain Information; Confidentiality
         113    
SECTION 12.11
           
Performance of Duties
         114    
SECTION 12.12
           
All Powers Coupled with Interest
         114    
SECTION 12.13
           
Survival
         114    
SECTION 12.14
           
Titles and Captions
         114    
SECTION 12.15
           
Severability of Provisions
         114    
SECTION 12.16
           
Counterparts; Integration; Effectiveness; Electronic Execution
         114    
SECTION 12.17
           
Term of Agreement
         115    
SECTION 12.18
           
USA PATRIOT Act
         115    
SECTION 12.19
           
Independent Effect of Covenants
         115    
SECTION 12.20
           
No Advisory or Fiduciary Responsibility
         115    
SECTION 12.21
           
Intercreditor Agreement
         116    
SECTION 12.22
           
Inconsistencies with Other Documents
         116    

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EXHIBITS    
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Swingline Note
Exhibit A-3 - Form of Term Loan Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Account Designation
Exhibit D - Form of Notice of Prepayment
Exhibit E - Form of Notice of Conversion/Continuation
Exhibit F - Form of Officer’s Compliance Certificate
Exhibit G - Form of Assignment and Assumption
Exhibit H-1 - Form of U.S. Tax Compliance Certificate (Non-Partnership Foreign Lenders)
Exhibit H-2 - Form of U.S. Tax Compliance Certificate (Non-Partnership Foreign Participants)
Exhibit H-3 - Form of U.S. Tax Compliance Certificate (Foreign Participant Partnerships)
Exhibit H-4 - Form of U.S. Tax Compliance Certificate (Foreign Lender Partnerships)
 
SCHEDULES
Schedule 1.1(a) - Commitments and Commitment Percentages
Schedule 2 - Post-Closing Matters

 

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CREDIT AGREEMENT, dated as of December 3, 2014, by and among COPART, INC., a Delaware corporation, as Borrower, the lenders who are party to this Agreement and the lenders who may become a party to this Agreement pursuant to the terms hereof, as Lenders, and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as Administrative Agent for the Lenders.

STATEMENT OF PURPOSE

The Borrower has requested, and subject to the terms and conditions set forth in this Agreement, the Administrative Agent and the Lenders have agreed to extend, certain credit facilities to the Borrower.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, such parties hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1                   Definitions . The following terms when used in this Agreement shall have the meanings assigned to them below:

“ Acquisition ” shall have the meaning set forth in the definition of Permitted Acquisition.

“ Additional Pari Passu Agreement ” has the meaning set forth in the Intercreditor Agreement.

“ Additional Pari Passu Debt ” shall mean any Indebtedness incurred by any Credit Party so long as (a) such Indebtedness is secured equally and ratably by the Collateral and the holders of such Indebtedness or a collateral agent for such holder executed a joinder to the Intercreditor Agreement in accordance with the terms thereof, (b) the representations, covenants and events of default in respect of such Indebtedness shall be no more restrictive (taken as a whole) on the applicable Credit Party than the representations, covenants and Events of Default contained in this Agreement (as determined by the Borrower in good faith) and (c) the final maturity date of such Indebtedness shall be no earlier than the Revolving Credit Maturity Date or the Term Loan Maturity Date and such Indebtedness shall have a Weighted Average Life to Maturity no shorter than the Loans.

 

“ Administrative Agent ” means Wells Fargo, in its capacity as Administrative Agent hereunder, and any successor thereto appointed pursuant to Section 11.6 .

“ Administrative Agent’s Office ” means the office of the Administrative Agent specified in or determined in accordance with the provisions of Section 12.1(c) .

“ Administrative Questionnaire ” means an administrative questionnaire in a form supplied by the Administrative Agent.

“ Affiliate ” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“ Agreement ” means this Credit Agreement.

 

 

 

“ Applicable Law ” means all applicable provisions of constitutions, laws, statutes, ordinances, rules, treaties, regulations, permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities and all orders and decrees of all courts and arbitrators.

“ Applicable Margin ” means the corresponding percentages per annum as set forth below based on the Consolidated Total Net Leverage Ratio:

Pricing Level Consolidated Total Net Leverage Ratio Commitment Fee LIBOR + Base Rate +
I Less than 1.00 to 1.00 0.20% 1.25% 0.25%
II Greater than or equal to 1.00 to 1.00, but less than 2.00 to 1.00 0.20% 1.50% 0.50%
III Greater than or equal to 2.00 to 1.00, but less than 3.00 to 1.00 0.30% 1.75% 0.75%
IV Greater than or equal to 3.00 to 1.00 0.35% 2.00% 1.00%
         

The Applicable Margin shall be determined and adjusted quarterly on the first Business Day after the day on which the Borrower provides an Officer’s Compliance Certificate pursuant to Section 8.2(a) for the most recently ended fiscal quarter of the Borrower (each such date, a “ Calculation Date ”); provided that (a) the Applicable Margin shall be based on Pricing Level II until the first Calculation Date occurring after the Closing Date and, thereafter the Pricing Level shall be determined by reference to the Consolidated Total Net Leverage Ratio as of the last day of the most recently ended fiscal quarter of the Borrower preceding the applicable Calculation Date, and (b) if the Borrower fails to provide an Officer’s Compliance Certificate when due as required by Section 8.2(a) for the most recently ended fiscal quarter of the Borrower preceding the applicable Calculation Date, the Applicable Margin from the date on which such Officer’s Compliance Certificate was required to have been delivered shall be based on Pricing Level IV until such time as such Officer’s Compliance Certificate is delivered, at which time the Pricing Level shall be determined by reference to the Consolidated Total Net Leverage Ratio as of the last day of the most recently ended fiscal quarter of the Borrower preceding such Calculation Date. The applicable Pricing Level shall be effective from one Calculation Date until the next Calculation Date. Any adjustment in the Pricing Level shall be applicable to all Extensions of Credit then existing or subsequently made or issued.

Notwithstanding the foregoing, in the event that any financial statement or Officer’s Compliance Certificate delivered pursuant to Section 8.1 or 8.2(a) is shown to be inaccurate (regardless of whether (i) this Agreement is in effect, (ii) any Commitments are in effect, or (iii) any Extension of Credit is outstanding when such inaccuracy is discovered or such financial statement or Officer’s Compliance Certificate was delivered), and such inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any period (an “ Applicable Period ”) than the Applicable Margin applied for such Applicable Period, then (A) the Borrower shall immediately deliver to the Administrative Agent a corrected Officer’s Compliance Certificate for such Applicable Period, (B) the Applicable Margin for such Applicable Period shall be determined as if the Consolidated Total Net Leverage Ratio in the corrected Officer’s Compliance Certificate were applicable for such Applicable Period, and (C) the Borrower shall immediately and retroactively be obligated to pay to the Administrative Agent the accrued additional interest and fees owing as a result of such increased Applicable Margin for such Applicable Period, which payment shall be promptly applied by the Administrative Agent in accordance with Section 5.4 . Nothing in this paragraph shall limit the rights of the Administrative Agent and Lenders with respect to Sections 5.1(b) and 10.2 nor any of their other rights under this Agreement or any other Loan Document. The Borrower’s obligations under this paragraph shall survive the termination of the Commitments and the repayment of all other Obligations hereunder.

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The Applicable Margins set forth above shall be increased as, and to the extent, required by Section 5.13 .

“ Approved Fund ” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“ Arranger ” means, collectively, Wells Fargo Securities, LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated, in their capacities as joint lead arrangers and joint bookrunners.

“ Asset Disposition ” means the sale, transfer, license, lease or other disposition of any Property (including any disposition by any Person of Equity Interests of another Person) by any Credit Party or any Subsidiary thereof, and any issuance of Equity Interests by any Subsidiary of the Borrower to any Person that is not a Credit Party or any Subsidiary thereof or that constitute directors’ qualifying shares or other shares required by Applicable Law to be owned by a Person other than the Borrower and/or one or more of its Wholly-Owned Subsidiaries. The term “ Asset Disposition ” shall not include (a) the sale of inventory in the ordinary course of business, (b) sales of non-core assets in connection with a transaction permitted by Section 9.3 , (c) the transfer of assets pursuant to any other transaction permitted pursuant to Section 9.4 , (d) the write-off, discount, sale or other disposition of defaulted or past-due receivables and similar obligations in the ordinary course of business and not undertaken as part of an accounts receivable financing transaction, (e) the disposition of any Hedge Agreement, (f) dispositions of Investments in cash and Cash Equivalents, (g) the transfer by any Credit Party of its assets to any other Credit Party, (h) the transfer by any Non-Guarantor Subsidiary of its assets to any Credit Party ( provided that in connection with any new transfer, such Credit Party shall not pay more than an amount equal to the fair market value of such assets as determined in good faith at the time of such transfer), (i) the transfer by any Non-Guarantor Subsidiary of its assets to any other Non-Guarantor Subsidiary, (j) the granting, creation or existence of a Permitted Lien, (k) the surrender or waiver of contract rights or litigation claims or the settlement, release or surrender of tort or litigation claims of any kind, (l) the transfer of improvements or alterations in connection with any lease of property upon the termination thereof, (m) the abandonment, lapse, or transfer of any domain name, trademark or other intellectual property right that is not material to the business of the Borrower and its Subsidiaries, taken as a whole, (n) any Restricted Payment permitted by Section 9.6 , (o) any Investment permitted by Section 9.3 , (p) any sale, transfer, license, lease or other disposition of any Property (in one transaction or a series of related transactions) with an aggregate fair market value of $5,000,000 or less, (q) foreclosure on assets by reason of eminent domain, (r) sales, transfers or other dispositions of assets acquired pursuant to a Permitted Acquisition that in the judgment of the Borrower’s management are not necessary or desirable to carry out the Borrower’s business plans, to the extent binding agreements or letters of intent providing for such sales, transfers or other dispositions are entered into within 12 months after the acquisition of such assets, (s) sales, transfers or other dispositions in respect of joint ventures to the extent required by, or made pursuant to, customary buy/sell arrangements between joint venture parties as set forth in the applicable joint venture agreement or similar arrangement and (t) sales, transfers or other dispositions to any Subsidiary of international rights to the Borrower’s or any of its Subsidiary’s patents, trademarks, copyrights, trade secrets or other intellectual property rights.

“ Assignment and Assumption ” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 12.9 ), and accepted by the Administrative Agent, in substantially the form attached as Exhibit G or any other form approved by the Administrative Agent.

“ Attributable Indebtedness ” means, on any date of determination, (a) in respect of any Capital Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease, the capitalized amount or principal amount of the remaining lease payments under the relevant lease that

3

 

would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capital Lease.

“ Available Amount ” means, on any date of determination, an aggregate amount equal to the sum of (a) $200,000,000 plus (b) 50% of cumulative Excess Cash Flow of the Borrower and its Subsidiaries for each fiscal quarter (beginning with the fiscal quarter ended January 31, 2015) minus (c) the amount of any Investments and Restricted Payments made using the Available Amount.

“ Base Rate ” means, at any time, the highest of (a) the Prime Rate, (b) the Federal Funds Rate plus 0.50% and (c) LIBOR for an Interest Period of one month plus 1%; each change in the Base Rate shall take effect simultaneously with the corresponding change or changes in the Prime Rate, the Federal Funds Rate or LIBOR ( provided that clause (c) shall not be applicable during any period in which LIBOR is unavailable or unascertainable).

“ Base Rate Loan ” means any Loan bearing interest at a rate based upon the Base Rate as provided in Section 5.1(a) .

“ Borrower ” means Copart, Inc., a Delaware corporation.

“ Business Day ” means (a) for all purposes other than as set forth in clause (b) below, any day other than a Saturday, Sunday or legal holiday on which banks in Charlotte, North Carolina and New York, New York, are open for the conduct of their commercial banking business and (b) with respect to all notices and determinations in connection with, and payments of principal and interest on, any LIBOR Rate Loan, or any Base Rate Loan as to which the interest rate is determined by reference to LIBOR, any day that is a Business Day described in clause (a) and that is also a London Banking Day.

“ Calculation Date ” has the meaning assigned thereto in the definition of Applicable Margin.

“ Capital Expenditures ” means, with respect to the Borrower and its Subsidiaries on a Consolidated basis, for any period, the additions to property, plant and equipment and other capital expenditures that are (or would be) set forth in a consolidated statement of cash flows of such Person for such period prepared in accordance with GAAP, but excluding expenditures for the restoration, repair or replacement of any fixed or capital asset which was destroyed or damaged, in whole or in part, to the extent financed by the proceeds of an insurance policy maintained by such Person.

“ Capital Lease ” means any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP.

“ Capital Lease Obligations ” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“ Cash Collateralize ” means, to deposit in a Controlled Account or to pledge and deposit with, or deliver to the Administrative Agent, or directly to the applicable Issuing Lender (with notice thereof to the Collateral Agent), for the benefit of one or more of the Issuing Lenders, the Swingline Lender or the Lenders, as collateral for L/C Obligations or obligations of the Lenders to fund participations in respect of L/C Obligations or Swingline Loans, cash or deposit account balances or, if the Administrative Agent and the applicable Issuing Lender and the Swingline Lender shall agree, in their sole discretion, other credit

4

 

support, in each case pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent, such Issuing Lender and the Swingline Lender, as applicable. “ Cash Collateral ” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

“ Cash Collateralized Letters of Credit ” means any cash collateralized letters of credit (other than Letters of Credit issued hereunder) or bank guarantees issued by Bank of America, N.A. or Wells Fargo Bank (or other banks in jurisdictions in which neither Bank of America, N.A. nor Wells Fargo Bank can issue letters of credit or bank guarantees) issued on behalf of the Borrower or its Subsidiaries.

“ Cash Equivalents ” means, collectively, (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency thereof maturing within twelve (12) months from the date of acquisition thereof, (b) commercial paper maturing no more than six (6) months from the date of creation thereof and currently having the one of the two highest ratings obtainable from either S&P or Moody’s, (c) certificates of deposit maturing no more than six (6) months from the date of creation thereof issued by commercial banks incorporated under the laws of the United States, each having combined capital, surplus and undivided profits of not less than $500,000,000 and having a rating of “A” or better by a nationally recognized rating agency, (d) time deposits maturing no more than thirty (30) days from the date of creation thereof with commercial banks or savings banks or savings and loan associations each having membership either in the FDIC or the deposits of which are insured by the FDIC and in amounts not exceeding the maximum amounts of insurance thereunder, (e) investments, classified in accordance with GAAP as current assets, in money market investment programs registered under the Investment Company Act of 1940 which are administered by reputable financial institutions having capital of at least $500,000,000 and the portfolios of which are limited to Investments of the character described in the foregoing subdivisions (a) through (d), (f) solely in the case of any Foreign Subsidiary, investments, instruments or securities equivalent to those referred to in clauses (a) through (e) of this definition denominated in any foreign currency that is the local currency of such Foreign Subsidiary, and (g) any other investments (whether short term or long term) permitted by the Borrower’s cash investment policy approved by the Borrower’s board of directors (or a committee thereof) as such policy is in effect, and as disclosed to the Administrative Agent, prior to the Closing Date (and as amended, restated, supplemented or otherwise modified from time to time, it being understood that any new investments permitted under such policy shall constitute Cash Equivalents for purposes of this Agreement only with the consent (such consent not to be unreasonably withheld) of the Administrative Agent.

“ Cash Management Agreement ” means any agreement to provide cash management services, including treasury, depository, overdraft, credit or debit card (including non-card electronic payables), electronic funds transfer and other cash management arrangements.

“ Cash Management Bank ” means any Person that, (a) at the time it enters into a Cash Management Agreement with a Credit Party, is a Lender, an Affiliate of a Lender, the Administrative Agent or the Collateral Agent or an Affiliate of the Administrative Agent or the Collateral Agent, or (b) at the time it (or its Affiliate) becomes a Lender (including on the Closing Date), is a party to a Cash Management Agreement with a Credit Party, in each case in its capacity as a party to such Cash Management Agreement.

“ Change in Control ” means an event or series of events by which:

(a)                 any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such person or its Subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) other than the Permitted Investors becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under

5

 

the Exchange Act, except that a “person” or “group” shall be deemed to have “beneficial ownership” of all Equity Interests that such “person” or “group” has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of thirty –five percent (35%) or more of the Equity Interests of the Borrower entitled to vote in the election of members of the board of directors (or equivalent governing body) of the Borrower; or

(b)                 there shall have occurred under any indenture or other instrument evidencing the Senior Notes or any Indebtedness in excess of the Threshold Amount any “change in control” or similar provision (as set forth in the indenture, agreement or other evidence of such Indebtedness), but excluding any “change of control” or similar defined term resulting solely from the failure of the Borrower’s common stock to be listed or quoted on a national securities exchange, obligating the Borrower or any of its Subsidiaries to repurchase, redeem or repay all or any part of the Indebtedness provided for therein.

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

“ Class ” means, when used in reference to any Loan, whether such Loan is a Revolving Credit Loan, Swingline Loan or Term Loan and, when used in reference to any Commitment, whether such Commitment is a Revolving Credit Commitment or a Term Loan Commitment.

“ Closing Date ” means the date of this Agreement.

“ Code ” means the Internal Revenue Code of 1986.

“ Collateral ” means the collateral security for the Secured Obligations pledged or granted pursuant to the Security Documents.

“ Collateral Agent ” means Wells Fargo Bank, National Association, in its capacity as Collateral Agent under the Intercreditor Agreement and the Security Documents, or any successor Collateral Agent.

“ Commitment Fee ” has the meaning assigned thereto in Section 5.3(a) .

“ Commitment Percentage ” means, as to any Lender, such Lender’s Revolving Credit Commitment Percentage or Term Loan Percentage, as applicable.

“ Commitments ” means, collectively, as to all Lenders, the Revolving Credit Commitments and the Term Loan Commitments of such Lenders.

“ Commodity Exchange Act ” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.).

“ Connection Income Taxes ” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

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“ Consolidated ” means, when used with reference to financial statements or financial statement items of any Person, such statements or items on a consolidated basis in accordance with applicable principles of consolidation under GAAP.

“ Consolidated EBITDA ” means, for any period, the sum of the following determined on a Consolidated basis, without duplication, for the Borrower and its Subsidiaries in accordance with GAAP: (a) Consolidated Net Income for such period plus (b) the sum of the following, without duplication, to the extent deducted in determining Consolidated Net Income for such period: (i) the provision for federal, state, local and foreign income taxes payable by the Borrower and its Subsidiaries for such period, including, without limitation, any franchise taxes or other taxes based on income, profits or capital and all other taxes that are included in the provision for income tax line item on the consolidated income statement of the Borrower and its Subsidiaries for such period, (ii) Consolidated Interest Expense, (iii) amortization, depreciation and other non cash charges or expenses (except to the extent that such non-cash charges are reserved for cash charges to be taken in the future), (iv) extraordinary losses (excluding extraordinary losses from discontinued operations), (v) cash acquisition related expenses, whether or not any acquisition is successful, and cash restructuring, integration and related charges or expenses (which for the avoidance of doubt, include retention, severance, systems establishment costs, contract termination costs, future lease commitments, and costs to consolidate facilities and relocate employees) in an aggregate amount for all add-backs pursuant to this clause (v) not to exceed an amount equal to 4% of Consolidated EBITDA for the period of four (4) consecutive fiscal quarters most recently ended prior to the date of determination for which financial statements have been provided pursuant to this Agreement, and (vi) Transaction Costs, less (c) the sum of the following, without duplication, to the extent included in determining Consolidated Net Income for such period: (i) interest income, (ii) any extraordinary gains and (iii) non-cash gains or non-cash items increasing Consolidated Net Income. For purposes of this Agreement, Consolidated EBITDA shall be adjusted on a Pro Forma Basis.

“ Consolidated Interest Coverage Ratio ” means, as of any date of determination, the ratio of (a) Consolidated EBITDA for the period of four (4) consecutive fiscal quarters ending on or immediately prior to such date to (b) Consolidated Interest Expense for the period of four (4) consecutive fiscal quarters ending on or immediately prior to such date

“ Consolidated Interest Expense ” means, for any period, the sum of the following determined on a Consolidated basis, without duplication, for the Borrower and its Subsidiaries in accordance with GAAP, interest expense (including, without limitation, interest expense attributable to Capital Lease Obligations and all net payment obligations pursuant to Hedge Agreements), premium payments, debt discounts and fees, charges and related expenses incurred in connection with the deferred purchase price of assets, for such period.

“ Consolidated Net Income ” means, for any period, the net income (or loss) of the Borrower and its Subsidiaries for such period, determined on a Consolidated basis, without duplication, in accordance with GAAP; provided , that in calculating Consolidated Net Income of the Borrower and its Subsidiaries for any period, there shall be excluded (a) the net income (or loss) of any Person (other than a Subsidiary which shall be subject to clause (c) below), in which the Borrower or any of its Subsidiaries has a joint interest with a third party, except to the extent such net income is actually paid in cash to the Borrower or any of its Subsidiaries by dividend or other distribution during such period, (b) the net income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of the Borrower or any of its Subsidiaries or is merged into or consolidated with the Borrower or any of its Subsidiaries or that Person’s assets are acquired by the Borrower or any of its Subsidiaries except to the extent included pursuant to the foregoing clause (a), (c) the net income (if positive) of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary to the Borrower or any of its Subsidiaries of such net income (i) is not at the time permitted by operation of the terms of its charter or any agreement,

7

 

instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Subsidiary or (ii) would be subject to any taxes payable on such dividends or distributions, but in each case only to the extent of such prohibition or taxes and (d) any gain or loss from Asset Dispositions during such period.

“ Consolidated Total Assets ” means, as of any date of determination, with respect to the Borrower and its Subsidiaries on a Consolidated basis, total assets, as determined in accordance with GAAP applied on a consistent basis.

 

“ Consolidated Total Indebtedness ” means, as of any date of determination with respect to the Borrower and its Subsidiaries on a Consolidated basis without duplication, the sum of the outstanding principal amount of all Indebtedness of the Borrower and its Subsidiaries described in clauses (a) through (d) and clauses (f), (g) and, solely with respect to the foregoing, clause (i) of the definition of Indebtedness; provided , however, the Cash Collateralized Letters of Credit shall be excluded from this definition so long as they are fully cash collateralized.

“ Consolidated Total Net Leverage Ratio ” means, as of any date of determination, the ratio of (a) Consolidated Total Indebtedness on such date minus the sum of (i) 100% of the amount of unrestricted cash and Cash Equivalents on the balance sheet of the Borrower with respect to the Borrower and its Domestic Subsidiaries and (ii) 66% of the amount of unrestricted cash and Cash Equivalents on the balance sheet of the Borrower with respect to its Foreign Subsidiaries to (b) Consolidated EBITDA for the period of four (4) consecutive fiscal quarters ending on or immediately prior to such date.

“ Control ” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “ Controlling ” and “ Controlled ” have meanings correlative thereto.

“ Controlled Account ” means each deposit account and securities account that is subject to an account control agreement in form and substance reasonably satisfactory to the Administrative Agent and each of the applicable Issuing Lenders that is entitled to Cash Collateral hereunder at the time such control agreement is executed.

“ Credit Facility ” means, collectively, the Revolving Credit Facility, the Term Loan Facility, the Swingline Facility and the L/C Facility.

“ Credit Parties ” means, collectively, the Borrower and the Guarantors.

“ Debt Issuance ” means the issuance of any Indebtedness for borrowed money by any Credit Party or any of its Subsidiaries.

“ Debtor Relief Laws ” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.

“ Default ” means any of the events specified in Section 10.1 which with the passage of time, the giving of notice or any other condition, would constitute an Event of Default.

“ Defaulting Lender ” means, subject to Section 5.15(b) , any Lender that (a) has failed to (i) fund all or any portion of the Revolving Credit Loans, any Term Loan, participations in L/C Obligations or participations in Swingline Loans required to be funded by it hereunder within two Business Days of the

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date such Loans or participations were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Borrower in writing that such failure is the result of such Lender’s determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, any Issuing Lender, the Swingline Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swingline Loans) within two Business Days of the date when due, (b) has notified the Borrower, the Administrative Agent, any Issuing Lender or the Swingline Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender’s obligation to fund a Loan hereunder and states that such position is based on such Lender’s determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Borrower, to confirm in writing to the Administrative Agent and the Borrower that it will comply with its prospective funding obligations hereunder ( provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Borrower), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the FDIC or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 5.15(b) ) upon delivery of written notice of such determination to the Borrower, each Issuing Lender, the Swingline Lender and each Lender.

“ Disclosure Letter ” means the disclosure letter dated as of the date hereof delivered by the Borrower to the Administrative Agent for the benefit of the Lenders.

“ Disqualified Equity Interests ” means any Equity Interests that, by their terms (or by the terms of any security or other Equity Interest into which they are convertible or for which they are exchangeable) or upon the happening of any event or condition, (a)  mature or are mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments), (b) are redeemable at the option of the holder thereof (other than solely for Qualified Equity Interests) (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Loans and all other Obligations that are accrued and payable and the termination of the Commitments), in whole or in part, (c) provide for the scheduled payment of dividends in cash or (d) are or become convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is 91 days after the Term Loan Maturity Date; provided that if such Equity Interests is issued pursuant to a plan for the benefit of the Borrower or its Subsidiaries or by any such plan to such employees, such Equity Interests shall not constitute

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Disqualified Equity Interests solely because they may be required to be repurchased by the Borrower or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.

“ Dollars ” or “ $ ” means, unless otherwise qualified, dollars in lawful currency of the United States.

“ Domestic Subsidiary ” means any Subsidiary organized under the laws of any political subdivision of the United States.

“ Eligible Assignee ” means any Person that meets the requirements to be an assignee under Section 12.9(b)(iii) , (v) and (vi) (subject to such consents, if any, as may be required under Section 12.9(b)(iii) ).

“ Employee Benefit Plan ” means (a) any employee benefit plan within the meaning of Section 3(3) of ERISA that is maintained for employees of any Credit Party or any ERISA Affiliate or (b) any Pension Plan or Multiemployer Plan that has at any time within the preceding six (6) years been maintained, funded or administered for the employees of any Credit Party or any current or former ERISA Affiliate.

“ Environmental Claims ” means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, accusations, allegations, notices of noncompliance or violation, investigations (other than internal reports prepared by any Person in the ordinary course of business and not in response to any third party action or request of any kind) or proceedings relating in any way to any actual or alleged violation of or liability under any Environmental Law or relating to any permit issued, or any approval given, under any such Environmental Law, including, without limitation, any and all claims by Governmental Authorities for enforcement, cleanup, removal, response, remedial or other actions or damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from Hazardous Materials or arising from alleged injury or threat of injury to public health or the environment.

“ Environmental Laws ” means any and all federal, foreign, state, provincial and local laws, statutes, ordinances, codes, rules, standards and regulations, permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities, relating to the protection of public health or the environment, including, but not limited to, requirements pertaining to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, handling, reporting, licensing, permitting, investigation or remediation of Hazardous Materials.

“ Equity Interests ” means (a) in the case of a corporation, capital stock, (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (c) in the case of a partnership, partnership interests (whether general or limited), (d) in the case of a limited liability company, membership interests, (e) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person and (f) any and all warrants, rights or options to purchase any of the foregoing.

“ Equity Issuance ” means (a) any issuance by the Borrower of shares of its Equity Interests to any Person that is not a Credit Party (including, without limitation, in connection with the exercise of options or warrants or the conversion of any debt securities to equity) and (b) any capital contribution from any Person that is not a Credit Party into any Credit Party or any Subsidiary thereof. The term “Equity Issuance” shall not include (A) any Asset Disposition or (B) any Debt Issuance.

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“ ERISA ” means the Employee Retirement Income Security Act of 1974, and the rules and regulations thereunder.

“ ERISA Affiliate ” means any Person who together with any Credit Party or any of its Subsidiaries is treated as a single employer within the meaning of Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA.

“ Eurodollar Reserve Percentage ” means, for any day, the percentage which is in effect for such day as prescribed by the Board of Governors of the Federal Reserve System (or any successor) for determining the maximum reserve requirement (including, without limitation, any basic, supplemental or emergency reserves) in respect of eurocurrency liabilities or any similar category of liabilities for a member bank of the Federal Reserve System in New York City.

“ Event of Default ” means any of the events specified in Section 10.1 ; provided that any requirement for passage of time, giving of notice, or any other condition, has been satisfied.

“ Excess Cash Flow ” means, for the Borrower and its Subsidiaries on a Consolidated basis, in accordance with GAAP for any Fiscal Year:

(a)                 the sum, without duplication, of (i) Consolidated Net Income for such Fiscal Year, (ii) an amount equal to the amount of all non-cash charges to the extent deducted in determining Consolidated Net Income for such Fiscal Year and (iii) decreases in Working Capital for such Fiscal Year, minus

(b)                 the sum, without duplication, of (i) the aggregate amount of cash (A) actually paid by the Borrower and its Subsidiaries during such Fiscal Year on account of Capital Expenditures and Permitted Acquisitions (other than any amounts that were committed during a prior Fiscal Year to the extent such amounts reduced Excess Cash Flow in such prior Fiscal Year per clause (b)(i)(B) below) and, (B) committed during such Fiscal Year to be used to make Capital Expenditures or Permitted Acquisitions which in either case have been actually made or consummated or for which a binding agreement exists as of the time of determination of Excess Cash Flow for such Fiscal Year (in each case under this clause (i) other than to the extent any such Capital Expenditure, Permitted Acquisition or other Investment is made or is expected to be made with the proceeds of Indebtedness, any Equity Issuance, casualty proceeds, condemnation proceeds or other proceeds that would not be included in Consolidated EBITDA), (ii) the aggregate amount of all scheduled principal payments or repayments of Indebtedness (other than mandatory prepayments of Loans) made by the Borrower and its Subsidiaries during such Fiscal Year, but only to the extent that such payments or repayments by their terms cannot be reborrowed or redrawn and do not occur in connection with a refinancing of all or any portion of such Indebtedness, (iii) voluntary principal prepayments of the Term Loan, the Senior Notes and voluntary prepayments or repayments of Revolving Credit Loans to the extent that the Revolving Credit Commitment is permanently reduced by an equal amount at the time of such payment or prepayment, (iv) an amount equal to the amount of all non-cash credits to the extent included in determining Consolidated Net Income for such Fiscal Year and (v) increases to Working Capital for such Fiscal Year.

“ Exchange Act ” means the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder.

“ Excluded Swap Obligation ” means, with respect to any Credit Party, any Swap Obligation if, and to the extent that, all or a portion of the liability of such Credit Party for or the guarantee of such Credit Party of, or the grant by such Credit Party of a security interest to secure, such Swap Obligation (or any liability or guarantee thereof) is or becomes illegal under the Commodity Exchange Act or any rule, regulation or order of the Commodity Futures Trading Commission (or the application or official

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interpretation of any thereof) by virtue of such Credit Party’s failure for any reason to constitute an “eligible contract participant” as defined in the Commodity Exchange Act and the regulations thereunder at the time the liability for or the guarantee of such Credit Party or the grant of such security interest becomes effective with respect to such Swap Obligation (such determination being made after giving effect to any applicable keepwell, support or other agreement for the benefit of the applicable Credit Party). If a Swap Obligation arises under a master agreement governing more than one swap, such exclusion shall apply only to the portion of such Swap Obligation that is attributable to swaps for which such guarantee or security interest is or becomes illegal for the reasons identified in the immediately preceding sentence of this definition.

“ Excluded Subsidiary ” means (a) each Domestic Subsidiary that is an Immaterial Subsidiary as of the Closing Date and listed on Schedule 1.1(b) to the Disclosure Letter and each future Domestic Subsidiary which is an Immaterial Subsidiary, in each case, for so long as such Subsidiary remains an Immaterial Subsidiary, (b) any Subsidiary substantially all of the assets of which consist of Equity Interests in Foreign Subsidiaries (a “ FSHCO ”), (c) each Subsidiary that is a Subsidiary of a Foreign Subsidiary, (d) any Person where a Guarantee is prohibited or restricted by contracts (so long as such contract or replacement or renewal thereof is in effect) with an unaffiliated third party existing on the Closing Date or at the time of the acquisition of such Subsidiary and not entered into in contemplation thereof or Applicable Law (including any requirement to obtain Governmental Authority or third party consent), or would result in material adverse tax consequences as reasonably determined by the Borrower in consultation with the Administrative Agent, (e) any special purpose entity, (f) any Foreign Subsidiary, other than any Foreign Subsidiary owned directly by a Credit Party if such Foreign Subidiary (i) is disregarded for U.S. federal income tax purposes and (ii) is not a FSHCO or (g) any other Domestic Subsidiaries to the extent the Administrative Agent and Borrower mutually determine that the cost and/or burden of obtaining the Guarantee outweigh the benefit to Lenders.

“ Excluded Taxes ” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that otherwise are Other Connection Taxes, (b) in the case of a Lender, United States federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 5.12(b) ) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 5.11 , amounts with respect to such Taxes were payable either to such Lender's assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient’s failure to comply with Section 5.11(g) and (d) any United States federal withholding Taxes imposed under FATCA .

“ Existing Credit Agreement ” means that certain Credit Agreement, dated as of December 14, 2010, between Copart, Inc. and Bank of America, N.A., as amended, restated, amended and restated or otherwise modified from time to time.

“ Extensions of Credit ” means, as to any Lender at any time, (a) an amount equal to the sum of (i) the aggregate principal amount of all Revolving Credit Loans made by such Lender then outstanding, (ii) such Lender’s Revolving Credit Commitment Percentage of the L/C Obligations then outstanding, (iii) such Lender’s Revolving Credit Commitment Percentage of the Swingline Loans then outstanding and (iv) the aggregate principal amount of the Term Loans made by such Lender then outstanding, or

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(b) the making of any Loan or participation in any Letter of Credit by such Lender, as the context requires.

“ FATCA ” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(1) of the Code, any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to such intergovernmental agreement.

“ FDIC ” means the Federal Deposit Insurance Corporation.

“ Federal Funds Rate ” means, for any day, the rate per annum equal to the weighted average of the rates on overnight federal funds transactions with members of the Federal Reserve System arranged by federal funds brokers on such day (or, if such day is not a Business Day, for the immediately preceding Business Day), as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that if such rate is not so published for any day which is a Business Day, such rate shall be determined based on the average of the quotation for such day on such transactions received by the Administrative Agent from three federal funds brokers of recognized standing selected by the Administrative Agent.

“ Fee Letters ” means (a) the separate engagement letter agreement dated November 4, 2014, by and among the Borrower, Wells Fargo and Bank of America, N.A. and (b) any letter between the Borrower and any Issuing Lender relating to certain fees payable to such Issuing Lender in its capacity as such.

“ First Tier Foreign Subsidiary ” means any Foreign Subsidiary that is a “controlled foreign corporation” within the meaning of Section 957 of the Code and the Equity Interests of which are owned directly by any Credit Party.

“ Fiscal Year ” means the fiscal year of the Borrower and its Subsidiaries ending on July 31.

“ Foreign Lender ” means (a) if the Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.

“ Foreign Subsidiary ” means any Subsidiary that is not a Domestic Subsidiary.

“ Fronting Exposure ” means, at any time there is a Defaulting Lender, (a) with respect to any Issuing Lender, such Defaulting Lender’s Revolving Credit Commitment Percentage of the outstanding L/C Obligations with respect to Letters of Credit issued by such Issuing Lender, other than such L/C Obligations as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof and (b) with respect to the Swingline Lender, such Defaulting Lender’s Revolving Credit Commitment Percentage of outstanding Swingline Loans other than Swingline Loans as to which such Defaulting Lender’s participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof.

“ Fund ” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.

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“ GAAP ” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

“ Governmental Approvals ” means all authorizations, consents, approvals, permits, licenses and exemptions of, and all registrations and filings with or issued by, any Governmental Authorities.

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

“ Guarantee ” of or by any Person (the “ guarantor ”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “ primary obligor ”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation or (e) for the purpose of assuming in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (whether in whole or in part); provided, however, that the term “Guarantee” shall not include any liability by endorsement of instruments for collection or deposit in the ordinary course of business or any customary and reasonable indemnity obligations entered into in the ordinary course of business or in connection with any transaction permitted hereby.

“ Guarantors ” means, collectively, all direct and indirect Subsidiaries of the Borrower (other than Excluded Subsidiaries) in existence on the Closing Date or which become a party to the Guaranty Agreement pursuant to Section 8.14 .

“ Guaranty Agreement ” means the unconditional guaranty agreement of even date herewith executed by the Borrower and Guarantors in favor of the Administrative Agent, for the ratable benefit and the Secured Parties, which shall be in form and substance acceptable to the Administrative Agent.

“ Hazardous Materials ” means any substances or materials (a) which are or become defined as hazardous wastes, hazardous substances, pollutants, contaminants, chemical substances or mixtures or toxic substances under any Environmental Law, (b) which are toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to public health or the environment and are or become regulated by any Governmental Authority, (c) the presence of which require investigation or remediation under any Environmental Law or common law, (d) the discharge or emission or release of which requires a permit or license under any Environmental Law or other Governmental Approval, (e) which are deemed by a Governmental Authority to constitute a nuisance or a trespass which pose a health or safety hazard to Persons or neighboring properties, or (f) which contain, without

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limitation, asbestos, polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic gas.

“ Hedge Agreement ” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement.

“ Hedge Bank ” means any Person that, (a) at the time it enters into a Hedge Agreement with a Credit Party permitted under Article IX , is a Lender, an Affiliate of a Lender, the Administrative Agent or the Collateral Agent or an Affiliate of the Administrative Agent or the Collateral Agent or (b) at the time it (or its Affiliate) becomes a Lender (including on the Closing Date), is a party to a Hedge Agreement with a Credit Party, in each case in its capacity as a party to such Hedge Agreement.

“ Hedge Termination Value ” means, in respect of any one or more Hedge Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Hedge Agreements, (a) for any date on or after the date such Hedge Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Hedge Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedge Agreements (which may include a Lender or any Affiliate of a Lender).

“ Immaterial Subsidiary ” means, any Domestic Subsidiary that owns 5% or less of consolidated assets of the Credit Parties and their Subsidiaries at the end of any fiscal quarter or generates 5% or less of Consolidated EBITDA of the Credit Parties and their Subsidiaries for any period of four consecutive fiscal quarters, in each case determined by reference to the most recently ended fiscal quarter for which financial statements have been provided by the Borrower pursuant to this Agreement; provided however , at no time shall all Immaterial Subsidiaries that have not become Guarantors in the aggregate own more than 15% of consolidated assets at the end of any fiscal quarter or generate more than 15% of Consolidated EBITDA of the Credit Parties and their Subsidiaries for any period of four consecutive fiscal quarters, in each case determined by reference to the most recently ended fiscal quarter for which financial statements have been provided by the Borrower pursuant to this Agreement.

“ Increased Amount Date ” has the meaning assigned thereto in Section 5.13(a) .

“ Incremental Lender ” has the meaning assigned thereto in Section 5.13(a) .

“ Incremental Loan Commitments ” has the meaning assigned thereto in Section 5.13(a)(ii) .

“ Incremental Loans ” has the meaning assigned thereto in Section 5.13(a)(ii) .

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“ Incremental Revolving Credit Commitment ” has the meaning assigned thereto in Section 5.13(a)(ii) .

“ Incremental Revolving Credit Increase ” has the meaning assigned thereto in Section 5.13(a)(ii) .

“ Incremental Term Loan ” has the meaning assigned thereto in Section 5.13(a)(i) .

“ Incremental Term Loan Commitment ” has the meaning assigned thereto in Section 5.13(a)(i) .

“ Indebtedness ” means, with respect to any Person at any date and without duplication, the sum of the following:

(a)                 all liabilities, obligations and indebtedness for borrowed money including, but not limited to, obligations evidenced by bonds, debentures, notes or other similar instruments of any such Person;

(b)                 all obligations to pay the deferred purchase price of property or services of any such Person, (i) except trade payables arising in the ordinary course of business not more than ninety (90) days past due, or that are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided for on the books of such Person, (ii) intercompany charges of expenses, deferred revenue and other accrued liabilities (including deferred payments in respect of services by employees), in each case incurred in the ordinary course of business, and (iii) any earn-out obligation or other post-closing balance sheet adjustment prior to such time as it becomes a liability on the balance sheet of such Person in accordance with GAAP);

(c)                 the Attributable Indebtedness of such Person with respect to such Person’s Capital Lease Obligations and Synthetic Leases (regardless of whether accounted for as indebtedness under GAAP);

(d)                 all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person to the extent of the value of such property (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business);

(e)                 all Indebtedness of any other Person secured by a Lien on any asset owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements except trade payables arising in the ordinary course of business), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(f)                  all obligations, contingent or otherwise, of any such Person relative to the face amount of letters of credit, whether or not drawn, including, without limitation, any Reimbursement Obligation, and banker’s acceptances issued for the account of any such Person;

(g)                 all obligations of any such Person in respect of Disqualified Equity Interests;

(h)                 all net obligations of such Person under any Hedge Agreements; and

(i)                   all Guarantees of any such Person with respect to any of the foregoing.

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For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person. The amount of any net obligation under any Hedge Agreement on any date shall be deemed to be the Hedge Termination Value thereof as of such date.

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

“ Initial Term Loan ” means the term loan made, or to be made, to the Borrower by the Term Loan Lenders pursuant to Section 4.1 .

“ Insurance and Condemnation Event ” means the receipt by any Credit Party or any of its Subsidiaries of any cash insurance proceeds or condemnation award payable by reason of theft, loss, physical destruction or damage, taking or similar event with respect to any of their respective Property.

“ Intercreditor Agreement ” means that certain intercreditor and collateral agency agreement, dated as of the Closing Date, by and among the Administrative Agent, the Collateral Agent, the Noteholders and the Credit Parties, in form and substance satisfactory to the Collateral Agent.

“ Interest Period ” means, as to each LIBOR Rate Loan, the period commencing on the date such LIBOR Rate Loan is disbursed or converted to or continued as a LIBOR Rate Loan and ending on the date one (1), two (2), three (3), or six (6) months or, if agreed by all of the relevant Lenders twelve (12) months thereafter, in each case as selected by the Borrower in its Notice of Borrowing or Notice of Conversion/Continuation and subject to availability; provided that:

(a)                 the Interest Period shall commence on the date of advance of or conversion to any LIBOR Rate Loan and, in the case of immediately successive Interest Periods, each successive Interest Period shall commence on the date on which the immediately preceding Interest Period expires;

(b)                 if any Interest Period would otherwise expire on a day that is not a Business Day, such Interest Period shall expire on the next succeeding Business Day; provided that if any Interest Period with respect to a LIBOR Rate Loan would otherwise expire on a day that is not a Business Day but is a day of the month after which no further Business Day occurs in such month, such Interest Period shall expire on the immediately preceding Business Day;

(c)                 any Interest Period with respect to a LIBOR Rate Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the relevant calendar month at the end of such Interest Period;

(d)                 no Interest Period shall extend beyond the Revolving Credit Maturity Date or the Term Loan Maturity Date, as applicable, and Interest Periods shall be selected by the Borrower so as to permit the Borrower to make the quarterly principal installment payments pursuant to Section 4.3 without payment of any amounts pursuant to Section 5.9 ; and

(e)                 there shall be no more than six (6) Interest Periods in effect at any time.

“ IRS ” means the United States Internal Revenue Service.

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“ ISP98 ” means the International Standby Practices (1998 Revision, effective January 1, 1999), International Chamber of Commerce Publication No. 590.

“ Issuing Lender ” means Wells Fargo Bank, National Association.

“ L/C Commitment ” means, as to the Issuing Lender, the obligation of the Issuing Lender to issue Letters of Credit for the account of the Borrower or one or more of its Subsidiaries from time to time in an aggregate amount equal to the L/C Sublimit.

“ L/C Facility ” means the letter of credit facility established pursuant to Article III .

“ L/C Obligations ” means at any time, an amount equal to the sum of (a) the aggregate undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit which have not then been reimbursed pursuant to Section 3.5 .

“ L/C Participants ” means, with respect to any Letter of Credit, the collective reference to all the Revolving Credit Lenders other than the applicable Issuing Lender.

“ L/C Sublimit ” means the lessor of (a) THIRTY FIVE MILLION DOLLARS ($35,000,000) and (b) the Revolving Credit Commitment.

“ Lender ” means each Person executing this Agreement as a Lender on the Closing Date and any other Person that shall have become a party to this Agreement as a Lender pursuant to an Assignment and Assumption or pursuant to Section 5.13 , other than any Person that ceases to be a party hereto as a Lender pursuant to an Assignment and Assumption. Unless the context otherwise requires, the term “Lenders” includes the Swingline Lender.

“ Lender Joinder Agreement ” means a joinder agreement in form and substance reasonably satisfactory to the Administrative Agent delivered in connection with Section 5.13 .

“ Lending Office ” means, with respect to any Lender, the office of such Lender maintaining such Lender’s Extensions of Credit.

“ Letter of Credit Application ” means an application, in the form specified by the applicable Issuing Lender from time to time, requesting such Issuing Lender to issue a Letter of Credit.

“ Letters of Credit ” means the collective reference to letters of credit issued pursuant to Section 3.1 . Notwithstanding anything to the contrary contained herein, a letter of credit issued by any Issuing Lender (other than Wells Fargo at any time it is also acting as Administrative Agent) shall not be a “Letter of Credit” for purposes of the Loan Documents until such time as the Administrative Agent has been notified in writing of the issuance thereof by the applicable Issuing Lender.

“ LIBOR ” means,

(a)                 for any interest rate calculation with respect to a LIBOR Rate Loan, the rate of interest per annum determined on the basis of the rate for deposits in Dollars for a period equal to the applicable Interest Period which appears on Reuters Screen LIBOR01 Page (or any applicable successor page) at approximately 11:00 a.m. (London time) two (2) London Banking Days prior to the first day of the applicable Interest Period. If, for any reason, such rate does not appear on Reuters Screen LIBOR01 Page (or any applicable successor page), then “LIBOR” shall be determined by the Administrative Agent to be the arithmetic average of the rate per annum at which deposits in Dollars would be offered by first class

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banks in the London interbank market to the Administrative Agent at approximately 11:00 a.m. (London time) two (2) London Banking Days prior to the first day of the applicable Interest Period for a period equal to such Interest Period.

(b)                 for any interest rate calculation with respect to a Base Rate Loan, the rate of interest per annum determined on the basis of the rate for deposits in Dollars for an Interest Period equal to one month (commencing on the date of determination of such interest rate) which appears on the Reuters Screen LIBOR01 Page (or any applicable successor page) at approximately 11:00 a.m. (London time) on such date of determination, or, if such date is not a Business Day, then the immediately preceding Business Day. If, for any reason, such rate does not appear on Reuters Screen LIBOR01 Page (or any applicable successor page) then “LIBOR” for such Base Rate Loan shall be determined by the Administrative Agent to be the arithmetic average of the rate per annum at which deposits in Dollars would be offered by first class banks in the London interbank market to the Administrative Agent at approximately 11:00 a.m. (London time) on such date of determination for a period equal to one month commencing on such date of determination. Notwithstanding the foregoing, for purposes of this Agreement, LIBOR shall in no event be less than 0.00% at any time (and if less than 0.00%, shall be deemed to be 0.00%).

 

Each calculation by the Administrative Agent of LIBOR shall be conclusive and binding for all purposes, absent manifest error.

“ LIBOR Rate ” means a rate per annum determined by the Administrative Agent pursuant to the following formula:

LIBOR Rate = LIBOR
  1.00-Eurodollar Reserve Percentage

 

“ LIBOR Rate Loan ” means any Loan bearing interest at a rate based upon the LIBOR Rate as provided in Section 5.1(a) .

“ Lien ” means, with respect to any asset, any mortgage, leasehold mortgage, lien, pledge, charge, security interest, hypothecation or encumbrance of any kind in respect of such asset. For the purposes of this Agreement, a Person shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, Capital Lease or other title retention agreement relating to such asset.

“ Loan Documents ” means, collectively, this Agreement, each Note, the Letter of Credit Applications, the Security Documents, the Guaranty Agreement, the Disclosure Letter, the Fee Letters, the Intercreditor Agreement and each other document, instrument, certificate and agreement executed and delivered by the Credit Parties or any of their respective Subsidiaries in favor of or provided to the Administrative Agent, the Collateral Agent or any Secured Party in connection with this Agreement or otherwise referred to herein or contemplated hereby (excluding any Secured Hedge Agreement and any Secured Cash Management Agreement).

“ Loans ” means the collective reference to the Revolving Credit Loans, the Term Loan and the Swingline Loans, and “Loan” means any of such Loans.

“ London Banking Day ” means any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank Eurodollar market.

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“ Material Adverse Effect ” means, with respect to the Borrower and its Subsidiaries, (a) a material adverse effect on the operations, business, assets, properties, liabilities (actual or contingent) or condition (financial or otherwise) of such Persons, taken as a whole, (b) a material impairment of the ability of any such Person to perform its obligations under the Loan Documents to which it is a party, (c) a material impairment of the rights and remedies of the Administrative Agent, the Collateral Agent or any Lender under any Loan Document or (d) a material adverse effect upon the legality, validity, binding effect or enforceability against any Credit Party of any Loan Document to which it is a party.

“ Material Contract ” means each of the agreements listed as exhibits to the Borrower’s Annual Report on Form 10-K for the year ended July 31, 2014, included therein pursuant to the requirements of clauses (2), (4), (9) or (10) of Item 601(b) of Regulation S-K promulgated under the Securities Act of 1933 (other than those which have expired, terminated or are otherwise no longer in effect).

“ Minimum Collateral Amount ” means, at any time, (a) with respect to Cash Collateral consisting of cash or deposit account balances, an amount equal to 103% of the sum of (i) the Fronting Exposure of the Issuing Lender with respect to Letters of Credit issued and outstanding at such time and (ii) the Fronting Exposure of the Swingline Lender with respect to all Swingline Loans outstanding at such time and (b) otherwise, an amount reasonably determined by the Administrative Agent and each of the applicable Issuing Lenders that is entitled to Cash Collateral hereunder at such time in their sole discretion.

“ Minimum Liquidity ” shall mean, as of any date of determination with respect to the Credit Parties, unused availability under the Revolving Credit Facility plus (a) 100% of the amount of unrestricted cash and Cash Equivalents of Borrower and its Domestic Subsidiaries and (b) 66% of the amount of unrestricted cash and Cash Equivalents of Borrower’s Foreign Subsidiaries, in each case as of such date. For the avoidance of doubt, cash shall not be deemed restricted by reason of the existence of (i) Liens granted pursuant to the Security Agreement (other than Cash Collateral under Section 5.14), (ii) restrictions on the use of cash imposed under this Agreement, any Private Placement Note Purchase Agreement or any Additional Pari Passu Debt or (iii) common law rights of setoff in favor of depository institutions.

 

“ Moody’s ” means Moody’s Investors Service, Inc.

“ Multiemployer Plan ” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which any Credit Party or any ERISA Affiliate is making, or is accruing an obligation to make, or has accrued an obligation to make contributions within the preceding six (6) years.

“ Net Cash Proceeds ” means, as applicable, (a) with respect to any Asset Disposition or Insurance and Condemnation Event, the gross proceeds received by any Credit Party or any of its Subsidiaries therefrom in the form of cash and Cash Equivalents (including any such proceeds in the form of any deferred payment pursuant to, or by monetization of, a note receivable or otherwise, as and when received) less the sum of (i) in the case of an Asset Disposition, all income taxes and other taxes assessed by, or reasonably estimated to be payable to, a Governmental Authority as a result of such transaction (provided that if such estimated taxes exceed the amount of actual taxes required to be paid in cash in respect of such Asset Disposition, the amount of such excess shall constitute Net Cash Proceeds), (ii) all reasonable and customary out-of-pocket fees, costs, commissions and expenses incurred in connection with such transaction or event and (iii) the principal amount of, premium, if any, and interest on any Indebtedness (other than the Secured Obligations) secured by a Lien on the asset (or a portion thereof) disposed of, which Indebtedness is required to be repaid in connection with such transaction or event, and (b) with respect to any Equity Issuance or Debt Issuance, the gross cash proceeds received by any Credit Party or any of its Subsidiaries therefrom less (i) all reasonable and customary out-of-pocket legal,

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accounting, investment banking, underwriting and other fees, costs, commissions, discounts and expenses incurred in connection therewith, and (ii) all income taxes and other taxes assessed by, or reasonably estimated to be payable to, a Governmental Authority as a result of such transaction (provided that if such estimated taxes exceed the amount of actual taxes required to be paid in cash in respect of such Equity Issuance or Debt Issuance, the amount of such excess shall constitute Net Cash Proceeds).

“ Non-Consenting Lender ” means any Lender that does not approve any consent, waiver, amendment, modification or termination that (i) requires the approval of all Lenders or all affected Lenders in accordance with the terms of Section 12.2 and (ii) has been approved by the Required Lenders.

“ Non-Defaulting Lender ” means, at any time, each Lender that is not a Defaulting Lender at such time.

“ Non-Guarantor Subsidiary ” means any Subsidiary of the Borrower that is not a Guarantor.

“ Noteholders ” shall means the holders of the Senior Notes.

“ Notes ” means the collective reference to the Revolving Credit Notes, the Swingline Note and the Term Loan Notes.

“ Notice of Account Designation ” has the meaning assigned thereto in Section 2.3(b) .

“ Notice of Borrowing ” has the meaning assigned thereto in Section 2.3(a) .

“ Notice of Conversion/Continuation ” has the meaning assigned thereto in Section 5.2 .

“ Notice of Prepayment ” has the meaning assigned thereto in Section 2.4(c) .

“ Obligations ” means, in each case, whether now in existence or hereafter arising: (a) the principal of and interest on (including interest accruing after the filing of any bankruptcy or similar petition) the Loans, (b) the L/C Obligations and (c) all other fees and commissions (including attorneys’ fees), charges, indebtedness, loans, liabilities, financial accommodations, obligations, covenants and duties owing by the Credit Parties and each of their respective Subsidiaries to the Lenders, the Issuing Lender, the Administrative Agent or the Collateral Agent, in each case under any Loan Document, with respect to any Loan or Letter of Credit of every kind, nature and description, direct or indirect, absolute or contingent, due or to become due, contractual or tortious, liquidated or unliquidated, and whether or not evidenced by any note and including interest and fees that accrue after the commencement by or against any Credit Party or any Subsidiary thereof of any proceeding under any Debtor Relief Laws, naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

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

“ Officer’s Compliance Certificate ” means a certificate of the chief financial officer or the treasurer of the Borrower substantially in the form attached as Exhibit F .

“ Operating Lease ” means, as to any Person as determined in accordance with GAAP, any lease of Property (whether real, personal or mixed) by such Person as lessee which is not a Capital Lease.

“ Other Connection Taxes ” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than

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connections arising solely from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“ Other Taxes ” means all present or future stamp, court, documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 5.12 ).

“ Pari Passu Lien Indebtedness ” means any Indebtedness that is incurred under clauses (i) or (j) or Section 9.1 and any refinancings, renewals, refundings or extensions thereof of such Indebtedness.

“ Participant ” has the meaning assigned thereto in Section 12.9(d) .

“ Participant Register ” has the meaning assigned thereto in Section 12.9(d) .

“ PATRIOT Act ” means the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)).

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

“ Pension Plan ” means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or Section 412 of the Code and which (a) is maintained, funded or administered for the employees of any Credit Party or any ERISA Affiliate or (b) has at any time within the preceding six (6) years been maintained, funded or administered for the employees of any Credit Party or any current or former ERISA Affiliates.

“ Permitted Acquisition ” means any acquisition by the Borrower or any Subsidiary in the form of the acquisition of all or substantially all of the assets, business or a line of business, or at least a majority of the outstanding Equity Interests which have the ordinary voting power for the election of directors of the board of directors (or equivalent governing body) (whether through purchase, merger or otherwise), of any other Person (each an “ Acquisition ”) if each such acquisition meets all of the following requirements:

(a)                 such Acquisition has been approved by the board of directors (or equivalent governing body) of the Person to be acquired;

(b)                 the Person or business to be acquired shall be in a line of business permitted pursuant to Section 9.11 ;

(c)                 if such transaction is a merger or consolidation involving the Borrower or a Guarantor, the Borrower or a Guarantor (or a Person that will become a Guarantor upon such merger or consolidation) shall be the surviving Person and no Change in Control shall have been effected thereby;

(d)                 (i) the Borrower shall be in compliance on a Pro Forma Basis (as of the date of the Acquisition and after giving effect thereto and any Indebtedness incurred in connection therewith) with each covenant contained in Section 9.15 and (ii) the Consolidated Total Net Leverage Ratio calculated on a Pro Forma Basis (as of the proposed closing date of the Acquisition and after giving effect thereto and any Indebtedness incurred in connection therewith (but without deduction for cash proceeds of any such Indebtedness)) shall be no greater than 3.25 to 1.00;

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(e)                 the Administrative Agent shall have received, for any such Acquisition with total consideration in excess of $50,000,000, (1) audited financial statements (or, if unavailable, management-prepared financial or pro forma financial statements) of the target for its two most recent fiscal years and for any fiscal quarters ended within the fiscal year to date and (2) an Officer’s Compliance Certificate for the most recent fiscal quarter end preceding such Acquisition for which financial statements are available demonstrating compliance with clause (d) above;

 

(f)                  no Default or Event of Default shall have occurred and be continuing both before and after giving effect to such Acquisition and any Indebtedness incurred in connection therewith; and

(g)                 both before and after giving effect to the Acquisition on a Pro Forma Basis, Minimum Liquidity shall be at least $75,000,000.

“ Permitted Investors ” means, Willis J. Johnson, A. Jayson Adair and their Affiliates, and their respective estate, spouse, siblings, heirs and lineal descendants, and spouses of any such persons, the legal representatives of the foregoing, and the trustee of any bona fide trust of which one or more of the foregoing are the principal beneficiaries or grantors.

“ Permitted Liens ” means the Liens permitted pursuant to Section 9.2 .

“ Person ” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“ Prime Rate ” means, at any time, the rate of interest per annum publicly announced from time to time by the Administrative Agent as its prime rate. Each change in the Prime Rate shall be effective as of the opening of business on the day such change in such prime rate occurs. The parties hereto acknowledge that the rate announced publicly by the Administrative Agent as its prime rate is an index or base rate and shall not necessarily be its lowest or best rate charged to its customers or other banks.

“ Private Placement Note Purchase Agreement ” has the meaning assigned thereto in Section 6.1(g) .

“ Pro Forma Basis ” means, for purposes of calculating Consolidated EBITDA for any period during which one or more Specified Transactions occurs, that such Specified Transaction (and all other Specified Transactions that have been consummated during the applicable period) shall be deemed to have occurred as of the first day of the applicable period of measurement and (i) all income statement items (whether positive or negative) attributable to the Property or Person disposed of in a Specified Disposition shall be excluded and all income statement items (whether positive or negative) attributable to the Property or Person acquired in a Permitted Acquisition shall be included ( provided that such income statement items to be included are reflected in financial statements or other financial data reasonably acceptable to the Administrative Agent and based upon reasonable assumptions and calculations which are expected to have a continuous impact) and (ii) with respect to any Indebtedness incurred or assumed in connection with such Specified Transaction, if such Indebtedness has a floating or formula rate, it shall have an implied rate of interest for the applicable period for purposes of this definition determined by utilizing the rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination.

“ Property ” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including, without limitation, Equity Interests.

“ Qualified Equity Interests ” means any Equity Interests that are not Disqualified Equity Interests.

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“ Recipient ” means (a) the Administrative Agent or the Collateral Agent, (b) any Lender and (c) any Issuing Lender, as applicable.

“ Register ” has the meaning assigned thereto in Section 12.9(c) .

“ Reimbursement Obligation ” means the obligation of the Borrower to reimburse any Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of Credit issued by such Issuing Lender.

“ Related Parties ” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person’s Affiliates.

“ Required Lenders ” means, at any time, Lenders having Total Credit Exposures representing more than fifty percent (50)% of the Total Credit Exposures of all Lenders. The Total Credit Exposure of any Defaulting Lender shall be disregarded in determining Required Lenders at any time. If there are three (3) or more unaffiliated Lenders at the time of such determination, at least two (2) unaffiliated Lenders shall be required to constitute “Required Lenders.”

“ Responsible Officer ” means, as to any Person, the chief executive officer, president, chief financial officer, vice president of finance, controller, treasurer or assistant treasurer of such Person or any other officer of such Person designated in writing by the Borrower and reasonably acceptable to the Administrative Agent. Any document delivered hereunder or under any other Loan Document that is signed by a Responsible Officer of a Person shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Person and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Person.

“ Restricted Payment ” has the meaning assigned thereto in Section 9.6 .

“ Revolving Credit Commitment ” means (a) as to any Revolving Credit Lender, the obligation of such Revolving Credit Lender to make Revolving Credit Loans to, and to purchase participations in L/C Obligations and Swingline Loans for the account of, the Borrower hereunder in an aggregate principal amount at any time outstanding not to exceed the amount set forth opposite such Revolving Credit Lender’s name on the Register, as such amount may be modified at any time or from time to time pursuant to the terms hereof (including, without limitation, Section 5.13 ) and (b) as to all Revolving Credit Lenders, the aggregate commitment of all Revolving Credit Lenders to make Revolving Credit Loans, as such amount may be modified at any time or from time to time pursuant to the terms hereof (including, without limitation, Section 5.13 ). The aggregate Revolving Credit Commitment of all the Revolving Credit Lenders on the Closing Date shall be THREE HUNDRED MILLION DOLLARS ($300,000,000). The initial Revolving Credit Commitment of each Revolving Credit Lender is set forth opposite the name of such Lender on Schedule 1.1(a) .

“ Revolving Credit Commitment Percentage ” means, with respect to any Revolving Credit Lender at any time, the percentage of the total Revolving Credit Commitments of all the Revolving Credit Lenders represented by such Revolving Credit Lender’s Revolving Credit Commitment. If the Revolving Credit Commitments have terminated or expired, the Revolving Credit Commitment Percentages shall be determined based upon the Revolving Credit Commitments most recently in effect, giving effect to any assignments. The initial Revolving Credit Commitment of each Revolving Credit Lender is set forth opposite the name of such Lender on Schedule 1.1(a) .

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“ Revolving Credit Exposure ” means, as to any Revolving Credit Lender at any time, the aggregate principal amount at such time of its outstanding Revolving Credit Loans and such Revolving Credit Lender’s participation in L/C Obligations and Swingline Loans at such time.

“ Revolving Credit Facility ” means the revolving credit facility established pursuant to Article II (including any increase in such revolving credit facility established pursuant to Section 5.13 ).

“ Revolving Credit Lenders ” means, collectively, all of the Lenders with a Revolving Credit Commitment.

“ Revolving Credit Loan ” means any revolving loan made to the Borrower pursuant to Section 2.1 , and all such revolving loans collectively as the context requires.

“ Revolving Credit Maturity Date ” means the earliest to occur of (a) December 3, 2019, (b) the date of termination of the entire Revolving Credit Commitment by the Borrower pursuant to Section 2.5 , and (c) the date of termination of the Revolving Credit Commitment pursuant to Section 10.2(a) .

“ Revolving Credit Note ” means a promissory note made by the Borrower in favor of a Revolving Credit Lender evidencing the Revolving Credit Loans made by such Revolving Credit Lender, substantially in the form attached as Exhibit A-1 , and any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part.

“ Revolving Credit Outstandings ” means the sum of (a) with respect to Revolving Credit Loans and Swingline Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Revolving Credit Loans and Swingline Loans, as the case may be, occurring on such date; plus (b) with respect to any L/C Obligations on any date, the aggregate outstanding amount thereof on such date after giving effect to any Extensions of Credit occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements of outstanding unpaid drawings under any Letters of Credit or any reductions in the maximum amount available for drawing under Letters of Credit taking effect on such date.

“ Revolving Extensions of Credit ” means (a) any Revolving Credit Loan then outstanding, (b) any Letter of Credit then outstanding or (c) any Swingline Loan then outstanding.

“ S&P ” means Standard & Poor’s Financial Services LLC, a part of McGraw-Hill Financial, and any successor thereto.

“ Sanctioned Country ” means a country subject to a sanctions program identified on the list maintained by OFAC and available at http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx, or as otherwise published from time to time.

“ Sanctioned Person ” means (a) a Person named on the list of “Specially Designated Nationals and Blocked Persons” maintained by OFAC available at http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx, or as otherwise published from time to time, (b) a Person named on the lists maintained by the United Nations Security Council available at http://www.un.org/sc/committees/list_compend.shtml, or as otherwise published from time to time, (c) a Person named on the lists maintained by the European Union available at http://eeas.europa.eu/cfsp/sanctions/consol-list_en.htm, or as otherwise published from time to time, (d) a Person named on the lists maintained by Her Majesty’s Treasury available at http://www.hm-treasury.gov.uk/fin_sanctions_index.htm, or as otherwise published from time to time, or (e) (i) an agency

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of the government of a Sanctioned Country, (ii) an organization controlled by a Sanctioned Country, or (iii) a person resident in a Sanctioned Country, to the extent subject to a sanctions program administered by OFAC.

“ SEC ” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

“ Secured Cash Management Agreement ” means any Cash Management Agreement between or among any Credit Party and any Cash Management Bank.

“ Secured Hedge Agreement ” means any Hedge Agreement between or among any Credit Party and any Hedge Bank.

“ Secured Obligations ” means, collectively, (a) the Obligations and (b) all existing or future payment and other obligations owing by any Credit Party under (i) any Secured Hedge Agreement (other than an Excluded Swap Obligation) and (ii) any Secured Cash Management Agreement.

“ Secured Parties ” means, collectively, the Administrative Agent, the Collateral Agent, the Lenders, the Issuing Lenders, the Hedge Banks, the Cash Management Banks, the Noteholders, the holders of any Additional Pari Passu Debt, each co-agent or sub-agent appointed by the Administrative Agent or the Collateral Agent from time to time pursuant to Section 11.5 , any other holder from time to time of any of any Secured Obligations and, in each case, their respective successors and permitted assigns.

“ Security Agreement ” means the security agreement of even date herewith executed by the Borrower and Guarantors in favor of the Collateral Agent, which shall be in form and substance acceptable to the Collateral Agent.

“ Security Documents ” means the collective reference to the Security Agreement and each other agreement or writing pursuant to which any Credit Party pledges or grants a security interest in any Property or assets securing the Secured Obligations.

“ Senior Notes ” shall mean a collective reference to the notes issued in connection with (a) the Private Placement Note Purchase Agreement and (b) any Additional Pari Passu Debt.

“ Solvent ” and “ Solvency ” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature, (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital, and (e) such Person is able to pay its debts and liabilities, contingent obligations and other commitments as they mature in the ordinary course of business. The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“ Specified Disposition ” means any disposition of all or substantially all of the assets or Equity Interests of any Subsidiary of the Borrower or any division, business unit, product line or line of business of the Borrower or any Subsidiary of the Borrower.

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“ Specified Transactions ” means (a) any Specified Disposition, (b) any Permitted Acquisition and (c) the Transactions.

“ Subordinated Indebtedness ” means the collective reference to any Indebtedness incurred by the Borrower or any of its Subsidiaries that by its terms is expressly subordinated in right and time of payment to the Obligations on terms and conditions satisfactory to the Administrative Agent.

“ Subsidiary ” means as to any Person, any corporation, partnership, limited liability company or other entity of which more than fifty percent (50%) of the outstanding Equity Interests having ordinary voting power to elect a majority of the board of directors (or equivalent governing body) or other managers of such corporation, partnership, limited liability company or other entity is at the time owned by (directly or indirectly) or the management is otherwise controlled by (directly or indirectly) such Person (irrespective of whether, at the time, Equity Interests of any other class or classes of such corporation, partnership, limited liability company or other entity shall have or might have voting power by reason of the happening of any contingency). Unless otherwise qualified, references to “Subsidiary” or “Subsidiaries” herein shall refer to those of the Borrower.

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

“ Swingline Commitment ” means the lesser of (a) FIFTY MILLION DOLLARS ($50,000,000) and (b) the Revolving Credit Commitment.

“ Swingline Facility ” means the swingline facility established pursuant to Section 2.2 .

“ Swingline Lender ” means Wells Fargo in its capacity as swingline lender hereunder or any successor thereto.

“ Swingline Loan ” means any swingline loan made by the Swingline Lender to the Borrower pursuant to Section 2.2 , and all such swingline loans collectively as the context requires.

“ Swingline Note ” means a promissory note made by the Borrower in favor of the Swingline Lender evidencing the Swingline Loans made by the Swingline Lender, substantially in the form attached as Exhibit A-2 , and any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part.

“ Synthetic Lease ” means any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product where such transaction is considered borrowed money indebtedness for tax purposes but is classified as an Operating Lease in accordance with GAAP.

“ Taxes ” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, fines, additions to tax or penalties applicable thereto.

“ Term Loan Commitment ” means (a) as to any Term Loan Lender, the obligation of such Term Loan Lender to make a portion of the Initial Term Loan and/or Incremental Term Loans, as applicable, to the account of the Borrower hereunder on the Closing Date (in the case of the Initial Term Loan) or the applicable borrowing date (in the case of any Incremental Term Loan) in an aggregate principal amount not to exceed the amount set forth opposite such Lender’s name on Schedule 1.1(a) , as such amount may be increased, reduced or otherwise modified at any time or from time to time pursuant to the terms hereof

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and (b) as to all Term Loan Lenders, the aggregate commitment of all Term Loan Lenders to make such Term Loans. The aggregate Term Loan Commitment of all Term Loan Lenders on the Closing Date shall be THREE HUNDRED MILLION DOLLARS ($300,000,000). The Term Loan Commitment of each Term Loan Lender as of the Closing Date is set forth opposite the name of such Term Loan Lender on Schedule 1.1(a) .

“ Term Loan Facility ” means the term loan facility established pursuant to Article IV (including any new term loan facility established pursuant to Section 5.13 ).

“ Term Loan First Lien Percentage ” means a fraction (expressed as a percentage), the numerator of which is the outstanding principal amount of the Term Loans at such time and the denominator of which is the sum of the outstanding principal amount of the Term Loans at such time plus the outstanding principal amount of all outstanding Pari Passu Lien Indebtedness at such time requiring a prepayment (or an offer to repay) from a specified Asset Disposition.

“ Term Loan Lender ” means any Lender with a Term Loan Commitment and/or outstanding Term Loans.

“ Term Loan Maturity Date ” means the first to occur of (a) December 3, 2019, and (b) the date of acceleration of the Term Loans pursuant to Section 10.2(a) .

“ Term Loan Note ” means a promissory note made by the Borrower in favor of a Term Loan Lender evidencing the portion of the Term Loans made by such Term Loan Lender, substantially in the form attached as Exhibit A-3 , and any substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part.

“ Term Loan Percentage ” means, with respect to any Term Loan Lender at any time, the percentage of the total outstanding principal balance of the Term Loans represented by the outstanding principal balance of such Term Loan Lender’s Term Loans. The Term Loan Percentage of each Term Loan Lender as of the Closing Date is set forth opposite the name of such Lender on Schedule 1.1(a) .

“ Term Loans ” means the Initial Term Loans and, if applicable, the Incremental Term Loans and “ Term Loan ” means any of such Term Loans.

“ Termination Event ” means the occurrence of any of the following which, individually or in the aggregate, has resulted or could reasonably be expected to result in liability of the Borrower in an aggregate amount in excess of the Threshold Amount: (a) a “Reportable Event” described in Section 4043 of ERISA for which the thirty (30) day notice requirement has not been waived by the PBGC, or (b) the withdrawal of any Credit Party or any ERISA Affiliate from a Pension Plan during a plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA, or (c) the termination of a Pension Plan, the filing of a notice of intent to terminate a Pension Plan or the treatment of a Pension Plan amendment as a termination, under Section 4041 of ERISA, if the plan assets are not sufficient to pay all plan liabilities, or (d) the institution of proceedings to terminate, or the appointment of a trustee with respect to, any Pension Plan by the PBGC, or (e) any other event or condition which would constitute grounds under Section 4042(a) of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan, or (f) the imposition of a Lien pursuant to Section 430(k) of the Code or Section 303 of ERISA, or (g) the determination that any Pension Plan or Multiemployer Plan is considered an at-risk plan or plan in endangered or critical status with the meaning of Sections 430, 431 or 432 of the Code or Sections 303, 304 or 305 of ERISA or (h) the partial or complete withdrawal of any Credit Party or any ERISA Affiliate from a Multiemployer Plan if withdrawal liability is asserted by such plan, or (i) any

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event or condition which results in the reorganization or insolvency of a Multiemployer Plan under Sections 4241 or 4245 of ERISA, or (j) any event or condition which results in the termination of a Multiemployer Plan under Section 4041A of ERISA or the institution by PBGC of proceedings to terminate a Multiemployer Plan under Section 4042 of ERISA, or (k) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon any Credit Party or any ERISA Affiliate.

“ Threshold Amount ” means $35,000,000.

“ Total Credit Exposure ” means, as to any Lender at any time, the unused Commitments, Revolving Credit Exposure and outstanding Term Loans of such Lender at such time.

“ Transaction Costs ” means all transaction fees, charges, costs, expenses and other amounts related to the Transactions (including, without limitation, any financing fees, merger and acquisition fees, legal fees and expenses, due diligence fees or any other fees and expenses in connection therewith), in each case to the extent paid within six (6) months of the closing of the Credit Facility.

“ Transactions ” means, collectively, (a) the repayment in full of all Indebtedness outstanding under the Existing Credit Agreement, (b) the initial Extensions of Credit and (c) the payment of fees, charges, costs, expenses and other amounts in connection with the foregoing and the Private Placement Note Purchase Agreement.

“ UCC ” means the Uniform Commercial Code as in effect in the State of New York.

“ United States ” means the United States of America.

“ U.S. Person ” means any Person that is a “United States person” as defined in Section 7701(a)(30) of the Code.

“ U.S. Tax Compliance Certificate ” has the meaning assigned thereto in Section 5.11(g) .

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

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

“ Wholly-Owned ” means, with respect to a Subsidiary, that all of the Equity Interests of such Subsidiary are, directly or indirectly, owned or controlled by the Borrower and/or one or more of its Wholly-Owned Subsidiaries (except for directors’ qualifying shares or other shares required by Applicable Law to be owned by a Person other than the Borrower and/or one or more of its Wholly-Owned Subsidiaries).

“ Withholding Agent ” means the Borrower and the Administrative Agent.

“ Working Capital ” means, for the Borrower and its Subsidiaries on a Consolidated basis and calculated in accordance with GAAP, as of any date of determination, the excess of (a) current assets (other than cash and cash equivalents and prepaid income taxes and the current portion of deferred

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income taxes) over (b) current liabilities, excluding, without duplication, (i) the current portion of any long-term Indebtedness, (ii) outstanding Revolving Credit Loans and Swingline Loans, (iii) the current portion of current income taxes and (iv) the current portion of accrued Consolidated Interest Expense.

SECTION 1.2                   Other Definitions and Provisions . With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document: (a) the definitions of terms herein shall apply equally to the singular and plural forms of the terms defined, (b) whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms, (c) the words “include”, “includes” and “including” shall be deemed to be followed by the phrase “without limitation”, (d) the word “will” shall be construed to have the same meaning and effect as the word “shall”, (e) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (f) the words “herein”, “hereof” and “hereunder”, and words of similar import, shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (g) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, this Agreement or the Disclosure Letter (as applicable), (h) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights, (i) the term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced, whether in physical or electronic form and (j) in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including”.

SECTION 1.3                   Accounting Terms .

(a)                 All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with GAAP, applied on a consistent basis, as in effect from time to time and in a manner consistent with that used in preparing the audited financial statements required by Section 8.1(a) , except as otherwise specifically prescribed herein. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, (i) Indebtedness of the Borrower and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 and FASB ASC 470-20 on financial liabilities shall be disregarded and (ii) any obligations arising under a lease that was accounted for by such Person as an operating lease as of the Closing Date and any similar lease entered into after the Closing Date by any Person shall be accounted for as obligations relating to an operating lease and not as a Capital Lease.

(b)                 If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Borrower or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Borrower shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP. Without limiting the foregoing, leases shall continue to be classified and accounted for on a basis consistent with that reflected in the Borrower’s audited financial statements for the fiscal year ended July 31, 2014 for all purposes of this Agreement, notwithstanding any change in

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GAAP relating thereto, unless the parties hereto shall enter into a mutually acceptable amendment addressing such changes, as provided for above.

SECTION 1.4                   UCC Terms . Terms defined in the UCC in effect on the Closing Date and not otherwise defined herein shall, unless the context otherwise indicates, have the meanings provided by those definitions. Subject to the foregoing, the term “UCC” refers, as of any date of determination, to the UCC then in effect.

SECTION 1.5                   Rounding . Any financial ratios required to be maintained pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio or percentage is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

SECTION 1.6                   References to Agreement and Laws . Unless otherwise expressly provided herein, (a) any definition or reference to formation documents, governing documents, agreements (including the Loan Documents) and other contractual documents or instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document; and (b) any definition or reference to any Applicable Law, including, without limitation, the Code, the Commodity Exchange Act, ERISA, the Exchange Act, the PATRIOT Act, the Securities Act of 1933, the UCC, the Investment Company Act of 1940, the Interstate Commerce Act, the Trading with the Enemy Act of the United States or any of the foreign assets control regulations of the United States Treasury Department, shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Applicable Law.

SECTION 1.7                   Times of Day . Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable).

SECTION 1.8                   Letter of Credit Amounts . Unless otherwise specified, all references herein to the amount of a Letter of Credit at any time shall be deemed to mean the maximum face amount of such Letter of Credit after giving effect to all increases thereof contemplated by such Letter of Credit or the Letter of Credit Application therefor (at the time specified therefor in such applicable Letter of Credit or Letter of Credit Application and as such amount may be reduced by (a) any permanent reduction of such Letter of Credit or (b) any amount which is drawn, reimbursed and no longer available under such Letter of Credit).

SECTION 1.9                   Guarantees . Unless otherwise specified, the amount of any Guarantee shall be the lesser of the principal amount of the obligations guaranteed and still outstanding and the maximum amount for which the guaranteeing Person may be liable pursuant to the terms of the instrument embodying such Guarantee.

SECTION 1.10               Covenant Compliance Generally . For purposes of determining compliance under Sections 9.1 , 9.2 , 9.3 , 9.5 and 9.6 , any amount in a currency other than Dollars will be converted to Dollars in a manner consistent with that used in calculating Consolidated Net Income in the most recent annual financial statements of the Borrower and its Subsidiaries delivered pursuant to Section 8.1(a) . Notwithstanding the foregoing, for purposes of determining compliance with Sections 9.1 , 9.2 and 9.3 , with respect to any amount of Indebtedness or Investment in a currency other than Dollars, no breach of any basket contained in such sections shall be deemed to have occurred solely as a result of changes in rates of exchange occurring after the time such Indebtedness or Investment is incurred; provided that for

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the avoidance of doubt, the foregoing provisions of this Section 1.10 shall otherwise apply to such Sections, including with respect to determining whether any Indebtedness or Investment may be incurred at any time under such Sections.

ARTICLE II

REVOLVING CREDIT FACILITY

SECTION 2.1                   Revolving Credit Loans . Subject to the terms and conditions of this Agreement and the other Loan Documents, and in reliance upon the representations and warranties set forth in this Agreement and the other Loan Documents, each Revolving Credit Lender severally agrees to make Revolving Credit Loans to the Borrower from time to time from the Closing Date through, but not including, the Revolving Credit Maturity Date as requested by the Borrower in accordance with the terms of Section 2.3 ; provided , that (a) the Revolving Credit Outstandings shall not exceed the Revolving Credit Commitment and (b) the Revolving Credit Exposure of any Revolving Credit Lender shall not at any time exceed such Revolving Credit Lender’s Revolving Credit Commitment. Each Revolving Credit Loan by a Revolving Credit Lender shall be in a principal amount equal to such Revolving Credit Lender’s Revolving Credit Commitment Percentage of the aggregate principal amount of Revolving Credit Loans requested on such occasion. Subject to the terms and conditions hereof, the Borrower may borrow, repay and reborrow Revolving Credit Loans hereunder until the Revolving Credit Maturity Date.

SECTION 2.2                   Swingline Loans .

(a)                 Availability . Subject to the terms and conditions of this Agreement and the other Loan Documents, including, without limitation, Section 6.2(d) of this Agreement, and in reliance upon the representations and warranties set forth in this Agreement and the other Loan Documents, the Swingline Lender may, in its sole discretion, make Swingline Loans to the Borrower from time to time from the Closing Date through, but not including, the Revolving Credit Maturity Date; provided , that (a) after giving effect to any amount requested, the Revolving Credit Outstandings shall not exceed the Revolving Credit Commitment and (b) the aggregate principal amount of all outstanding Swingline Loans (after giving effect to any amount requested) shall not exceed the Swingline Commitment.

(b)                 Refunding .

(i)                   Swingline Loans shall be refunded by the Revolving Credit Lenders on demand by the Swingline Lender. Such refundings shall be made by the Revolving Credit Lenders in accordance with their respective Revolving Credit Commitment Percentages and shall thereafter be reflected as Revolving Credit Loans of the Revolving Credit Lenders on the books and records of the Administrative Agent. Each Revolving Credit Lender shall fund its respective Revolving Credit Commitment Percentage of Revolving Credit Loans as required to repay Swingline Loans outstanding to the Swingline Lender upon demand by the Swingline Lender but in no event later than 1:00 p.m. on the next succeeding Business Day after such demand is made. No Revolving Credit Lender’s obligation to fund its respective Revolving Credit Commitment Percentage of a Swingline Loan shall be affected by any other Revolving Credit Lender’s failure to fund its Revolving Credit Commitment Percentage of a Swingline Loan, nor shall any Revolving Credit Lender’s Revolving Credit Commitment Percentage be increased as a result of any such failure of any other Revolving Credit Lender to fund its Revolving Credit Commitment Percentage of a Swingline Loan.

(ii)                 The Borrower shall pay to the Swingline Lender on demand the amount of such Swingline Loans to the extent amounts received from the Revolving Credit Lenders are not

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sufficient to repay in full the outstanding Swingline Loans requested or required to be refunded. In addition, the Borrower hereby authorizes the Administrative Agent to charge any account maintained by the Borrower with the Swingline Lender (up to the amount available therein) in order to immediately pay the Swingline Lender the amount of such Swingline Loans to the extent amounts received from the Revolving Credit Lenders are not sufficient to repay in full the outstanding Swingline Loans requested or required to be refunded. If any portion of any such amount paid to the Swingline Lender shall be recovered by or on behalf of the Borrower from the Swingline Lender in bankruptcy or otherwise, the loss of the amount so recovered shall be ratably shared among all the Revolving Credit Lenders in accordance with their respective Revolving Credit Commitment Percentages (unless the amounts so recovered by or on behalf of the Borrower pertain to a Swingline Loan extended after the occurrence and during the continuance of an Event of Default of which the Administrative Agent has received notice in the manner required pursuant to Section 11.3 and which such Event of Default has not been waived by the Required Lenders or the Lenders, as applicable).

(iii)                Each Revolving Credit Lender acknowledges and agrees that its obligation to refund Swingline Loans in accordance with the terms of this Section is absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, non-satisfaction of the conditions set forth in Article VI . Further, each Revolving Credit Lender agrees and acknowledges that if prior to the refunding of any outstanding Swingline Loans pursuant to this Section, one of the events described in Section 10.1(h) or (i) shall have occurred, each Revolving Credit Lender will, on the date the applicable Revolving Credit Loan would have been made, purchase an undivided participating interest in the Swingline Loan to be refunded in an amount equal to its Revolving Credit Commitment Percentage of the aggregate amount of such Swingline Loan. Each Revolving Credit Lender will immediately transfer to the Swingline Lender, in immediately available funds, the amount of its participation and upon receipt thereof the Swingline Lender will deliver to such Revolving Credit Lender a certificate evidencing such participation dated the date of receipt of such funds and for such amount. Whenever, at any time after the Swingline Lender has received from any Revolving Credit Lender such Revolving Credit Lender’s participating interest in a Swingline Loan, the Swingline Lender receives any payment on account thereof, the Swingline Lender will distribute to such Revolving Credit Lender its participating interest in such amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such Revolving Credit Lender’s participating interest was outstanding and funded).

(c)                 Defaulting Lenders . Notwithstanding anything to the contrary contained in this Agreement, this Section 2.2 shall be subject to the terms and conditions of Section 5.14 and Section 5.15 .

SECTION 2.3                   Procedure for Advances of Revolving Credit Loans and Swingline Loans .

(a)                 Requests for Borrowing . The Borrower shall give the Administrative Agent irrevocable prior written notice substantially in the form of Exhibit B (a “ Notice of Borrowing ”) not later than 11:00 a.m. (i) on the same Business Day as each Base Rate Loan and each Swingline Loan and (ii) at least three (3) Business Days before each LIBOR Rate Loan, of its intention to borrow, specifying (A) the date of such borrowing, which shall be a Business Day, (B) the amount of such borrowing, which shall be, (x) with respect to Base Rate Loans (other than Swingline Loans) in an aggregate principal amount of $3,000,000 or a whole multiple of $1,000,000 in excess thereof, (y) with respect to LIBOR Rate Loans in an aggregate principal amount of $5,000,000 or a whole multiple of $1,000,000 in excess thereof and (z) with respect to Swingline Loans in an aggregate principal amount of $500,000 or a whole multiple of $100,000 in excess thereof, (C) whether such Loan is to be a Revolving Credit Loan or Swingline Loan, (D) in the case of a Revolving Credit Loan whether the Loans are to be LIBOR Rate Loans or Base Rate

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Loans, and (E) in the case of a LIBOR Rate Loan, the duration of the Interest Period applicable thereto; provided that if the Borrower wishes to request LIBOR Rate Loans having an Interest Period of twelve months in duration, such notice must be received by the Administrative Agent not later than 11:00 a.m. four (4) Business Days prior to the requested date of such borrowing, whereupon the Administrative Agent shall give prompt notice to the Revolving Credit Lenders of such request and determine whether the requested Interest Period is acceptable to all of them. If the Borrower fails to specify a type of Loan in a Notice of Borrowing, then the applicable Loans shall be made as Base Rate Loans. If the Borrower requests a Borrowing of LIBOR Rate Loans in any such Notice of Borrowing, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. A Notice of Borrowing received after 11:00 a.m. shall be deemed received on the next Business Day. The Administrative Agent shall promptly notify the Revolving Credit Lenders of each Notice of Borrowing.

(b)                 Disbursement of Revolving Credit and Swingline Loans . Not later than 1:00 p.m. on the proposed borrowing date, (i) each Revolving Credit Lender will make available to the Administrative Agent, for the account of the Borrower, at the office of the Administrative Agent in funds immediately available to the Administrative Agent, such Revolving Credit Lender’s Revolving Credit Commitment Percentage of the Revolving Credit Loans to be made on such borrowing date and (ii) the Swingline Lender will make available to the Administrative Agent, for the account of the Borrower, at the office of the Administrative Agent in funds immediately available to the Administrative Agent, the Swingline Loans to be made on such borrowing date. The Borrower hereby irrevocably authorizes the Administrative Agent to disburse the proceeds of each borrowing requested pursuant to this Section in immediately available funds by crediting or wiring such proceeds to the deposit account of the Borrower identified in the most recent notice substantially in the form attached as Exhibit C (a “ Notice of Account Designation ”) delivered by the Borrower to the Administrative Agent or as may be otherwise agreed upon by the Borrower and the Administrative Agent from time to time. Subject to Section 5.7 hereof, the Administrative Agent shall not be obligated to disburse the portion of the proceeds of any Revolving Credit Loan requested pursuant to this Section to the extent that any Revolving Credit Lender has not made available to the Administrative Agent its Revolving Credit Commitment Percentage of such Loan. Revolving Credit Loans to be made for the purpose of refunding Swingline Loans shall be made by the Revolving Credit Lenders as provided in Section 2.2(b) .

SECTION 2.4                   Repayment and Prepayment of Revolving Credit and Swingline Loans .

(a)                 Repayment on Termination Date . The Borrower hereby agrees to repay the outstanding principal amount of (i) all Revolving Credit Loans in full on the Revolving Credit Maturity Date, and (ii) all Swingline Loans in accordance with Section 2.2(b) (but, in any event, no later than the Revolving Credit Maturity Date), together, in each case, with all accrued but unpaid interest thereon.

(b)                 Mandatory Prepayments . If at any time the Revolving Credit Outstandings exceed the Revolving Credit Commitment, the Borrower agrees to repay immediately upon notice from the Administrative Agent, by payment to the Administrative Agent for the account of the Revolving Credit Lenders, Extensions of Credit in an amount equal to such excess with each such repayment applied first , to the principal amount of outstanding Swingline Loans, second to the principal amount of outstanding Revolving Credit Loans and third , with respect to any Letters of Credit then outstanding, a payment of Cash Collateral into a Cash Collateral account opened by the Administrative Agent, for the benefit of the Revolving Credit Lenders, in an amount equal to such excess (such Cash Collateral to be applied in accordance with Section 10.2(b) ).

(c)                 Optional Prepayments . The Borrower may at any time and from time to time prepay Revolving Credit Loans and Swingline Loans, in whole or in part, with irrevocable prior written notice to the Administrative Agent substantially in the form attached as Exhibit D (a “ Notice of Prepayment ”)

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given not later than 11:00 a.m. (i) on the same Business Day as the prepayment for each Base Rate Loan and each Swingline Loan and (ii) at least three (3) Business Days before the prepayment of each LIBOR Rate Loan, specifying the date and amount of prepayment and whether the prepayment is of LIBOR Rate Loans, Base Rate Loans, Swingline Loans or a combination thereof, and, if of a combination thereof, the amount allocable to each. Upon receipt of such notice, the Administrative Agent shall promptly notify each Revolving Credit Lender. If any such notice is given, the amount specified in such notice shall be due and payable on the date set forth in such notice. Partial prepayments shall be in an aggregate amount of $3,000,000 or a whole multiple of $1,000,000 in excess thereof with respect to Base Rate Loans (other than Swingline Loans), $5,000,000 or a whole multiple of $1,000,000 in excess thereof with respect to LIBOR Rate Loans and $500,000 or a whole multiple of $100,000 in excess thereof with respect to Swingline Loans (or in any case, if less, the outstanding principal balance of such Loans). A Notice of Prepayment received after 11:00 a.m. shall be deemed received on the next Business Day. Each such repayment shall be accompanied by any amount required to be paid pursuant to Section 5.9 hereof. Notwithstanding the foregoing, any Notice of a Prepayment delivered in connection with any refinancing of all of the Credit Facility or other transaction, may be, if expressly so stated to be, contingent upon the consummation of such refinancing or other transaction and may be revoked by the Borrower in the event such refinancing is not consummated ( provided that the failure of such contingency shall not relieve the Borrower from its obligations in respect thereof under Section 5.9 ).

(d)                 [ Reserved ].

(e)                 Limitation on Prepayment of LIBOR Rate Loans . The Borrower may not prepay any LIBOR Rate Loan on any day other than on the last day of the Interest Period applicable thereto unless such prepayment is accompanied by any amount required to be paid pursuant to Section 5.9 hereof.

(f)                  Hedge Agreements . No repayment or prepayment of the Loans pursuant to this Section shall affect any of the Borrower’s obligations under any Hedge Agreement entered into with respect to the Loans.

SECTION 2.5                   Permanent Reduction of the Revolving Credit Commitment .

(a)                 Voluntary Reduction . The Borrower shall have the right at any time and from time to time, upon at least five (5) Business Days prior irrevocable written notice to the Administrative Agent, to permanently reduce, without premium or penalty, (i) the entire Revolving Credit Commitment at any time or (ii) portions of the Revolving Credit Commitment, from time to time, in an aggregate principal amount not less than $3,000,000 or any whole multiple of $1,000,000 in excess thereof. Any reduction of the Revolving Credit Commitment shall be applied to the Revolving Credit Commitment of each Revolving Credit Lender according to its Revolving Credit Commitment Percentage. All Commitment Fees accrued until the effective date of any termination of the Revolving Credit Commitment shall be paid on the effective date of such termination. Notwithstanding the foregoing, any notice to reduce the Revolving Credit Commitment delivered in connection with any refinancing of all of the Credit Facility or other transaction, may be, if expressly so stated to be, contingent upon the consummation of such refinancing or other transaction and may be revoked by the Borrower in the event such refinancing is not consummated ( provided that the failure of such contingency shall not relieve the Borrower from its obligations in respect thereof under Section 5.9 ).

(b)                 [ Reserved ].

(c)                 [ Reserved] .

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(d)                 Corresponding Payment . Each permanent reduction permitted pursuant to this Section shall be accompanied by a payment of principal sufficient to reduce the aggregate outstanding Revolving Credit Loans, Swingline Loans and L/C Obligations, as applicable, after such reduction to the Revolving Credit Commitment as so reduced, and if the aggregate amount of all outstanding Letters of Credit exceeds the Revolving Credit Commitment as so reduced, the Borrower shall be required to deposit Cash Collateral in a Cash Collateral account opened by the Administrative Agent in an amount equal to such excess. Such Cash Collateral shall be applied in accordance with Section 10.2(b) . Any reduction of the Revolving Credit Commitment to zero shall be accompanied by payment of all outstanding Revolving Credit Loans and Swingline Loans (and furnishing of Cash Collateral satisfactory to the Administrative Agent for all L/C Obligations) and shall result in the termination of the Revolving Credit Commitment and the Swingline Commitment and the Revolving Credit Facility. If the reduction of the Revolving Credit Commitment requires the repayment of any LIBOR Rate Loan, such repayment shall be accompanied by any amount required to be paid pursuant to Section 5.9 hereof.

SECTION 2.6                   Termination of Revolving Credit Facility . The Revolving Credit Facility and the Revolving Credit Commitments shall terminate on the Revolving Credit Maturity Date.

ARTICLE III

LETTER OF CREDIT FACILITY

SECTION 3.1                   L/C Facility .

(a)                 Availability . Subject to the terms and conditions hereof, each Issuing Lender, in reliance on the agreements of the Revolving Credit Lenders set forth in Section 3.4(a) , agrees to issue standby Letters of Credit in an aggregate amount not to exceed its L/C Commitment for the account of the Borrower or, subject to Section 3.10 , any Subsidiary thereof, Letters of Credit may be issued on any Business Day from the Closing Date through but not including the thirtieth (30 th ) Business Day prior to the Revolving Credit Maturity Date in such form as may be approved from time to time by the applicable Issuing Lender; provided , that no Issuing Lender shall issue any Letter of Credit if, after giving effect to such issuance, (a) the L/C Obligations would exceed the L/C Sublimit or (b) the Revolving Credit Outstandings would exceed the Revolving Credit Commitment. Each Letter of Credit shall (i) be denominated in Dollars in a minimum amount of $500,000 (or such lesser amount as agreed to by the applicable Issuing Lender and the Administrative Agent), (ii) expire on a date no more than twelve (12) months after the date of issuance or last renewal of such Letter of Credit (subject to automatic renewal for additional one (1) year periods pursuant to the terms of the Letter of Credit Application or other documentation acceptable to the applicable Issuing Lender), which date shall be no later than the fifth (5th) Business Day prior to the Revolving Credit Maturity Date and (iii) be subject to the ISP98 as set forth in the Letter of Credit Application or as determined by the applicable Issuing Lender and, to the extent not inconsistent therewith, the laws of the State of New York. No Issuing Lender shall at any time be obligated to issue any Letter of Credit hereunder if (A) any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain such Issuing Lender from issuing such Letter of Credit, or any Applicable Law applicable to such Issuing Lender or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over such Issuing Lender shall prohibit, or request that such Issuing Lender refrain from, the issuance of letters of credit generally or such Letter of Credit in particular or shall impose upon such Issuing Lender with respect to letters of credit generally or such Letter of Credit in particular any restriction or reserve or capital requirement (for which such Issuing Lender is not otherwise compensated) not in effect on the Closing Date, or any unreimbursed loss, cost or expense that was not applicable, in effect or known to such Issuing Lender as of the Closing Date and that such Issuing Lender in good faith deems material to it, or (C) the conditions set forth in Section 6.2 are not satisfied. References herein to

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“issue” and derivations thereof with respect to Letters of Credit shall also include extensions or modifications of any outstanding Letters of Credit, unless the context otherwise requires.

(b)                 Defaulting Lenders . Notwithstanding anything to the contrary contained in this Agreement, Article III shall be subject to the terms and conditions of Section 5.14 and Section 5.15 .

SECTION 3.2                   Procedure for Issuance of Letters of Credit . The Borrower may from time to time request that any Issuing Lender issue a Letter of Credit by delivering to such Issuing Lender at its applicable office (with a copy to the Administrative Agent at the Administrative Agent’s Office) a Letter of Credit Application therefor, completed to the satisfaction of such Issuing Lender, and such other certificates, documents and other papers and information as such Issuing Lender or the Administrative Agent may request. Upon receipt of any Letter of Credit Application, the applicable Issuing Lender shall, process such Letter of Credit Application and the certificates, documents and other papers and information delivered to it in connection therewith in accordance with its customary procedures and shall, subject to Section 3.1 and Article VI , promptly issue the Letter of Credit requested thereby (but in no event shall such Issuing Lender be required to issue any Letter of Credit earlier than three (3) Business Days after its receipt of the Letter of Credit Application therefor and all such other certificates, documents and other papers and information relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed by such Issuing Lender and the Borrower. The applicable Issuing Lender shall promptly furnish to the Borrower and the Administrative Agent a copy of such Letter of Credit and the Administrative Agent shall promptly notify each Revolving Credit Lender of the issuance and upon request by any Lender, furnish to such Revolving Credit Lender a copy of such Letter of Credit and the amount of such Revolving Credit Lender’s participation therein.

SECTION 3.3                   Commissions and Other Charges .

(a)                 Letter of Credit Commissions . Subject to Section 5.15(a)(iii)(B) , the Borrower shall pay to the Administrative Agent, for the account of the applicable Issuing Lender and the L/C Participants, a letter of credit commission with respect to each Letter of Credit in the amount equal to the daily amount available to be drawn under such standby Letters of Credit times the Applicable Margin with respect to Revolving Credit Loans that are LIBOR Rate Loans (determined, in each case, on a per annum basis). Such commission shall be payable quarterly in arrears on the last Business Day of each calendar quarter, on the Revolving Credit Maturity Date and thereafter on demand of the Administrative Agent. The Administrative Agent shall, promptly following its receipt thereof, distribute to the applicable Issuing Lender and the L/C Participants all commissions received pursuant to this Section 3.3 in accordance with their respective Revolving Credit Commitment Percentages.

(b)                 Issuance Fee . In addition to the foregoing commission, the Borrower shall pay directly to the applicable Issuing Lender, for its own account, an issuance fee with respect to each Letter of Credit issued by such Issuing Lender as set forth in the Fee Letter executed by such Issuing Lender. Such issuance fee shall be payable quarterly in arrears on the last Business Day of each calendar quarter commencing with the first such date to occur after the issuance of such Letter of Credit, on the Revolving Credit Maturity Date and thereafter on demand of the applicable Issuing Lender.

(c)                 Other Fees, Costs, Charges and Expenses . In addition to the foregoing fees and commissions, the Borrower shall pay or reimburse each Issuing Lender for such normal and customary fees, costs, charges and expenses as are incurred or charged by such Issuing Lender in issuing, effecting payment under, amending or otherwise administering any Letter of Credit issued by it.

SECTION 3.4                   L/C Participations .

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(a)                 Each Issuing Lender irrevocably agrees to grant and hereby grants to each L/C Participant, and, to induce each Issuing Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from each Issuing Lender, on the terms and conditions hereinafter stated, for such L/C Participant’s own account and risk an undivided interest equal to such L/C Participant’s Revolving Credit Commitment Percentage in each Issuing Lender’s obligations and rights under and in respect of each Letter of Credit issued by it hereunder and the amount of each draft paid by such Issuing Lender thereunder. Each L/C Participant unconditionally and irrevocably agrees with each Issuing Lender that, if a draft is paid under any Letter of Credit issued by such Issuing Lender for which such Issuing Lender is not reimbursed in full by the Borrower through a Revolving Credit Loan or otherwise in accordance with the terms of this Agreement, such L/C Participant shall pay to such Issuing Lender upon demand at such Issuing Lender’s address for notices specified herein an amount equal to such L/C Participant’s Revolving Credit Commitment Percentage of the amount of such draft, or any part thereof, which is not so reimbursed.

(b)                 Upon becoming aware of any amount required to be paid by any L/C Participant to any Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion of any payment made by such Issuing Lender under any Letter of Credit, issued by it, such Issuing Lender shall notify the Administrative Agent of such unreimbursed amount and the Administrative Agent shall notify each L/C Participant (with a copy to the applicable Issuing Lender) of the amount and due date of such required payment and such L/C Participant shall pay to the Administrative Agent (which, in turn shall pay such Issuing Lender) the amount specified on the applicable due date. If any such amount is paid to such Issuing Lender after the date such payment is due, such L/C Participant shall pay to such Issuing Lender on demand, in addition to such amount, the product of (i) such amount, times (ii) the daily average Federal Funds Rate as determined by the Administrative Agent during the period from and including the date such payment is due to the date on which such payment is immediately available to such Issuing Lender, times (iii) a fraction the numerator of which is the number of days that elapse during such period and the denominator of which is 360. A certificate of such Issuing Lender with respect to any amounts owing under this Section shall be conclusive in the absence of manifest error. With respect to payment to such Issuing Lender of the unreimbursed amounts described in this Section, if the L/C Participants receive notice that any such payment is due (A) prior to 1:00 p.m. on any Business Day, such payment shall be due that Business Day, and (B) after 1:00 p.m. on any Business Day, such payment shall be due on the following Business Day.

(c)                 Whenever, at any time after any Issuing Lender has made payment under any Letter of Credit issued by it and has received from any L/C Participant its Revolving Credit Commitment Percentage of such payment in accordance with this Section, such Issuing Lender receives any payment related to such Letter of Credit (whether directly from the Borrower or otherwise), or any payment of interest on account thereof, such Issuing Lender will distribute to such L/C Participant its pro rata share thereof; provided , that in the event that any such payment received by such Issuing Lender shall be required to be returned by such Issuing Lender, such L/C Participant shall return to such Issuing Lender the portion thereof previously distributed by such Issuing Lender to it.

SECTION 3.5                   Reimbursement Obligation of the Borrower . In the event of any drawing under any Letter of Credit, the Borrower agrees to reimburse (either with the proceeds of a Revolving Credit Loan as provided for in this Section or with funds from other sources), in same day funds, the applicable Issuing Lender on each date on which such Issuing Lender notifies the Borrower of the date and amount of a draft paid by it under any Letter of Credit for the amount of (a) such draft so paid and (b) any amounts referred to in Section 3.3(c) incurred by such Issuing Lender in connection with such payment. Unless the Borrower shall immediately notify such Issuing Lender that the Borrower intends to reimburse such Issuing Lender for such drawing from other sources or funds, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting that the

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Revolving Credit Lenders make a Revolving Credit Loan bearing interest at the Base Rate on the applicable repayment date in the amount of (i) such draft so paid and (ii) any amounts referred to in Section 3.3(c) incurred by such Issuing Lender in connection with such payment, and the Revolving Credit Lenders shall make a Revolving Credit Loan bearing interest at the Base Rate in such amount, the proceeds of which shall be applied to reimburse such Issuing Lender for the amount of the related drawing and such fees and expenses. Each Revolving Credit Lender acknowledges and agrees that its obligation to fund a Revolving Credit Loan in accordance with this Section to reimburse such Issuing Lender for any draft paid under a Letter of Credit issued by it is absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, non-satisfaction of the conditions set forth in Section 2.3(a) or Article VI . If the Borrower has elected to pay the amount of such drawing with funds from other sources and shall fail to reimburse such Issuing Lender as provided above, the unreimbursed amount of such drawing shall bear interest at the rate which would be payable on any outstanding Base Rate Loans which were then overdue from the date such amounts become payable (whether at stated maturity, by acceleration or otherwise) until payment in full.

SECTION 3.6                   Obligations Absolute . The Borrower’s obligations under this Article III (including, without limitation, the Reimbursement Obligation) shall be absolute and unconditional under any and all circumstances and irrespective of any set off, counterclaim or defense to payment which the Borrower may have or have had against the applicable Issuing Lender or any beneficiary of a Letter of Credit or any other Person. The Borrower also agrees that the applicable Issuing Lender and the L/C Participants shall not be responsible for, and the Borrower’s Reimbursement Obligation under Section 3.5 shall not be affected by, among other things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among the Borrower and any beneficiary of any Letter of Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of the Borrower against any beneficiary of such Letter of Credit or any such transferee. No Issuing Lender shall be liable for any error, omission, interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit issued by it, except for errors or omissions caused by such Issuing Lender’s gross negligence or willful misconduct, as determined by a court of competent jurisdiction by final nonappealable judgment. The Borrower agrees that any action taken or omitted by any Issuing Lender under or in connection with any Letter of Credit issued by it or the related drafts or documents, if done in the absence of gross negligence or willful misconduct shall be binding on the Borrower and shall not result in any liability of such Issuing Lender or any L/C Participant to the Borrower. The responsibility of any Issuing Lender to the Borrower in connection with any draft presented for payment under any Letter of Credit issued to it shall, in addition to any payment obligation expressly provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment substantially conforms to the requirements under such Letter of Credit.

SECTION 3.7                   Effect of Letter of Credit Application . To the extent that any provision of any Letter of Credit Application related to any Letter of Credit is inconsistent with the provisions of this Article III , the provisions of this Article III shall apply.

SECTION 3.8       Resignation of Issuing Lenders .

(a)                 [Reserved].

(b)                 Any Lender may at any time resign from its role as an Issuing Lender hereunder upon not less than thirty (30) days prior notice to the Borrower and the Administrative Agent (or such shorter period of time as may be acceptable to the Borrower and the Administrative Agent).

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(c)                 Any resigning Issuing Lender shall retain all the rights, powers, privileges and duties of an Issuing Lender hereunder with respect to all Letters of Credit issued by it that are outstanding as of the effective date of its resignation as an Issuing Lender and all L/C Obligations with respect thereto (including, without limitation, the right to require the Revolving Credit Lenders to take such actions as are required under Section 3.4 ). Without limiting the foregoing, upon the resignation of a Lender as an Issuing Lender hereunder, the Borrower may, or at the request of such resigned Issuing Lender the Borrower shall, use commercially reasonable efforts to, arrange for one or more of the other Issuing Lenders to issue Letters of Credit hereunder in substitution for the Letters of Credit, if any, issued by such resigned Issuing Lender and outstanding at the time of such resignation, or make other arrangements satisfactory to the resigned Issuing Lender to effectively cause another Issuing Lender to assume the obligations of the resigned Issuing Lender with respect to any such Letters of Credit.

SECTION 3.9       Reporting of Letter of Credit Information and L/C Commitment . At any time that there is an Issuing Lender that is not also the financial institution acting as Administrative Agent, then (a) on the last Business Day of each calendar month, (b) on each date that a Letter of Credit is amended, terminated or otherwise expires, (c) on each date that a Letter of Credit is issued or the expiry date of a Letter of Credit is extended, and (d) upon the request of the Administrative Agent, each Issuing Lender (or, in the case of clauses (b), (c) or (d) of this Section, the applicable Issuing Lender) shall deliver to the Administrative Agent a report setting forth in form and detail reasonably satisfactory to the Administrative Agent information (including, without limitation, any reimbursement, Cash Collateral, or termination in respect of Letters of Credit issued by such Issuing Lender) with respect to each Letter of Credit issued by such Issuing Lender that is outstanding hereunder. In addition, each Issuing Lender shall provide notice to the Administrative Agent of its L/C Commitment, or any change thereto, promptly upon it becoming an Issuing Lender or making any change to its L/C Commitment. No failure on the part of any Issuing Bank Issuer to provide such information pursuant to this Section 3.9 shall limit the obligations of the Borrower or any Revolving Credit Lender hereunder with respect to its reimbursement and participation obligations hereunder.

SECTION 3.10   Letters of Credit Issued for Subsidiaries . Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, the Borrower shall be obligated to reimburse, or to cause the applicable Subsidiary to reimburse, the applicable Issuing Lender hereunder for any and all drawings under such Letter of Credit. The Borrower hereby acknowledges that the issuance of Letters of Credit for the account of any of its Subsidiaries inures to the benefit of the Borrower and that the Borrower’s business derives substantial benefits from the businesses of such Subsidiaries.

ARTICLE IV

TERM LOAN FACILITY

SECTION 4.1                   Initial Term Loan . Subject to the terms and conditions of this Agreement and the other Loan Documents, and in reliance upon the representations and warranties set forth in this Agreement and the other Loan Documents, each Term Loan Lender severally agrees to make the Initial Term Loan to the Borrower on the Closing Date in a principal amount equal to such Lender’s Term Loan Commitment as of the Closing Date. Notwithstanding the foregoing, if the total Term Loan Commitment as of the Closing Date is not drawn on the Closing Date, the undrawn amount shall automatically be cancelled.

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SECTION 4.2                   Procedure for Advance of Term Loan .

(a)                 Initial Term Loan . The Borrower shall give the Administrative Agent an irrevocable Notice of Borrowing prior to 11:00 a.m. on the Closing Date requesting that the Term Loan Lenders make the Initial Term Loan as a Base Rate Loan on such date (provided that the Borrower may request, no later than three (3) Business Days prior to the Closing Date, that the Lenders make the Initial Term Loan as a LIBOR Rate Loan if the Borrower has delivered to the Administrative Agent a letter in form and substance reasonably satisfactory to the Administrative Agent indemnifying the Lenders in the manner set forth in Section 5.9 of this Agreement). Upon receipt of such Notice of Borrowing from the Borrower, the Administrative Agent shall promptly notify each Term Loan Lender thereof. Not later than 1:00 p.m. on the Closing Date, each Term Loan Lender will make available to the Administrative Agent for the account of the Borrower, at the Administrative Agent’s Office in immediately available funds, the amount of such Initial Term Loan to be made by such Term Loan Lender on the Closing Date. The Borrower hereby irrevocably authorizes the Administrative Agent to disburse the proceeds of the Initial Term Loan in immediately available funds by wire transfer to such Person or Persons as may be designated by the Borrower in writing.

(b)                 Incremental Term Loans . Any Incremental Term Loans shall be borrowed pursuant to, and in accordance with Section 5.13 .

SECTION 4.3                   Repayment of Term Loans .

(a)                 Initial Term Loan . The Borrower shall repay the aggregate outstanding principal amount of the Initial Term Loan in consecutive quarterly installments on the last Business Day of each of March, June, September and December commencing December 31, 2014 as set forth below, except as the amounts of individual installments may be adjusted pursuant to Section 4.4 hereof:

PAYMENT DATE PRINCIPAL INSTALLMENT
December 31, 2014 $18,750,000
March 31, 2015 $18,750,000
June 30, 2015 $18,750,000
September 30, 2015 $18,750,000
December 31, 2015 $18,750,000
March 31, 2016 $7,500,000
June 30, 2016 $7,500,000
September 30, 2016 $7,500,000
December 31, 2016 $7,500,000
March 31, 2017 $7,500,000
June 30, 2017 $7,500,000
September 30, 2017 $7,500,000
December 31, 2017 $7,500,000
March 31, 2018 $7,500,000
June 30, 2018 $7,500,000
September 30, 2018 $7,500,000
December 31, 2018 $7,500,000
March 31, 2019 $7,500,000
June 30, 2019 $7,500,000
September 30, 2019 $7,500,000
   

 

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If not sooner paid, the aggregate unpaid principal amount of the Initial Term Loan shall be paid in full, together with accrued interest thereon, on the Term Loan Maturity Date.

(b)                 Incremental Term Loans . The Borrower shall repay the aggregate outstanding principal amount of each Incremental Term Loan (if any) as determined pursuant to, and in accordance with, Section 5.13 .

SECTION 4.4                   Prepayments of Term Loans .

(a)                 Optional Prepayments . The Borrower shall have the right at any time and from time to time, without premium or penalty, to prepay the Term Loans, in whole or in part, upon delivery to the Administrative Agent of a Notice of Prepayment not later than 11:00 a.m. (i) on the same Business Day as each Base Rate Loan and (ii) at least three (3) Business Days before each LIBOR Rate Loan, specifying the date and amount of repayment, whether the repayment is of LIBOR Rate Loans or Base Rate Loans or a combination thereof, and if a combination thereof, the amount allocable to each and whether the repayment is of the Initial Term Loan, an Incremental Term Loan or a combination thereof, and if a combination thereof, the amount allocable to each. Each optional prepayment of the Term Loans hereunder shall be in an aggregate principal amount of at least $5,000,000 or any whole multiple of $1,000,000 in excess thereof (or in each case, if less, the then outstanding principal amount of the applicable Term Loan) and shall be applied, on a pro rata basis, to the outstanding principal installments of the Initial Term Loan and, if applicable, any Incremental Term Loans as directed by the Borrower. Each repayment shall be accompanied by any amount required to be paid pursuant to Section 5.9 hereof. A Notice of Prepayment received after 11:00 a.m. shall be deemed received on the next Business Day. The Administrative Agent shall promptly notify the applicable Term Loan Lenders of each Notice of Prepayment. Notwithstanding the foregoing, any Notice of Prepayment delivered in connection with any refinancing of all of the Credit Facility or other transaction may be, if expressly so stated to be, contingent upon the consummation of such refinancing or transaction and may be revoked by the Borrower in the event such refinancing or transaction is not consummated; provided that the delay or failure of such contingency shall not relieve the Borrower from its obligations in respect thereof under Section 5.9 .

(b)                 Mandatory Prepayments .

(i)                   Debt Issuances . The Borrower shall make mandatory principal prepayments of the Loans in the manner set forth in clause (iii) below in an amount equal to one hundred percent (100%) of the aggregate Net Cash Proceeds from any Debt Issuance not otherwise permitted pursuant to Section 9.1 . Such prepayment shall be made within three (3) Business Days after the date of receipt of the Net Cash Proceeds of any such Debt Issuance.

(ii)                 Asset Dispositions .

(A)               Upon an Asset Disposition under Section 9.5(f) or any Insurance and Condemnation Event, the Net Cash Proceeds received by the Borrower or its Subsidiaries may be applied:

(x) in the case of any Asset Disposition by a Subsidiary that is not a Guarantor or consisting of Equity Interests of a Subsidiary that is not a Guarantor, to repay Indebtedness of such Subsidiary, or

(y) to reinvest in or acquire assets (including Equity Interests or other assets acquired in connection with a Permitted Acquisition or that would constitute a Permitted Investment) used or useful in a business permitted under

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Section 9.11 ; provided that to the extent the assets subject to such Asset Disposition were Collateral, such newly acquired assets shall also be Collateral.

If any Net Cash Proceeds are not applied or invested (or committed pursuant to a written agreement to be applied or invested) as provided in subclause (x) or (y) of subclause (A) above within 365 days after receipt (or in the case of any amount committed to be so applied or reinvested, which are not actually so applied or reinvested within 180 days following such 365 day period) will be deemed to constitute “Excess Proceeds.” Within five (5) Business Days following the date on which the aggregate amount of Excess Proceeds exceeds $25.0 million during any Fiscal Year (or, if such threshold is not met during any Fiscal Year, within five (5) Business Days following the end of such Fiscal Year), the Borrower shall make mandatory principal prepayments of the Term Loans in the manner set forth in clause (iii) below in amounts equal to the Term Loan First Lien Percentage of such Excess Proceeds from any Asset Disposition (other than for the avoidance of doubt any Asset Disposition permitted pursuant to, and in accordance with, clauses (a) through (e) of Section 9.5 ).

 

(iii)                Notice; Manner of Payment . Upon the occurrence of any event triggering the prepayment requirement under clauses (i) or (ii) above, the Borrower shall promptly deliver a Notice of Prepayment to the Administrative Agent and upon receipt of such notice, the Administrative Agent shall promptly so notify the Lenders. Each prepayment of the Loans under this Section shall be applied as follows: subject to the Intercreditor Agreement, ratably between the Initial Term Loans and any Incremental Term Loans to reduce on a pro rata basis the remaining scheduled principal installments of the Initial Term Loans and as determined by the Borrower and the applicable Incremental Lenders to reduce the remaining scheduled principal installments of any Incremental Term Loans) pursuant to Section 4.3 (it being understood that the minimum amounts and increments set forth in Section 4.4 shall not apply to prepayments under this Section 4.4(b)) . For the avoidance of doubt, the Borrower shall be permitted to apply Net Cash Proceeds from any Asset Disposition or any Insurance and Condemnation Event to repay, prepay redeem, purchase or otherwise acquire the Term Loan First Lien Percentage of the Term Loans and other Pari Passu Lien Indebtedness using the balance of the Net Cash Proceeds at any time without waiting for the end of the reinvestment period and determining Excess Proceeds. Pending the final application of any such Net Cash Proceeds, the Borrower or its Subsidiaries may temporarily reduce revolving indebtedness under any revolving debt facility or otherwise invest such Net Cash Proceeds in cash or Cash Equivalents.

(iv)               No Reborrowings . Amounts prepaid under the Term Loan pursuant to this Section may not be reborrowed. Each prepayment shall be accompanied by any amount required to be paid pursuant to Section 5.9 .

ARTICLE V

GENERAL LOAN PROVISIONS

SECTION 5.1                   Interest .

(a)                 Interest Rate Options . Subject to the provisions of this Section, at the election of the Borrower, (i) Revolving Credit Loans and the Term Loans shall bear interest at (A) the Base Rate plus the Applicable Margin or (B) the LIBOR Rate plus the Applicable Margin ( provided that the LIBOR Rate shall not be available until three (3) Business Days (or four (4) Business Days with respect to a LIBOR Rate based on a twelve month Interest Period) after the Closing Date unless the Borrower has delivered to

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the Administrative Agent a letter in form and substance reasonably satisfactory to the Administrative Agent indemnifying the Lenders in the manner set forth in Section 5.9 of this Agreement) and (ii) any Swingline Loan shall bear interest at the Base Rate plus the Applicable Margin. The Borrower shall select the rate of interest and Interest Period, if any, applicable to any Loan at the time a Notice of Borrowing is given or at the time a Notice of Conversion/Continuation is given pursuant to Section 5.2 .

(b)                 Default Rate . Subject to Section 10.3 , (i) immediately upon the occurrence and during the continuance of an Event of Default under Section 10.1(a) , (b) , (h) or (i) , or (ii) at the election of the Required Lenders, upon the occurrence and during the continuance of any other Event of Default, (A) the Borrower shall no longer have the option to request LIBOR Rate Loans, Swingline Loans or Letters of Credit, (B) all outstanding LIBOR Rate Loans shall bear interest at a rate per annum of two percent (2%) in excess of the rate (including the Applicable Margin) then applicable to LIBOR Rate Loans until the end of the applicable Interest Period and thereafter at a rate equal to two percent (2%) in excess of the rate (including the Applicable Margin) then applicable to Base Rate Loans, (C) all outstanding Base Rate Loans and other Obligations arising hereunder or under any other Loan Document shall bear interest at a rate per annum equal to two percent (2%) in excess of the rate (including the Applicable Margin) then applicable to Base Rate Loans or such other Obligations arising hereunder or under any other Loan Document and (D) all accrued and unpaid interest shall be due and payable on demand of the Administrative Agent. Interest shall continue to accrue on the Obligations after the filing by or against the Borrower of any petition seeking any relief in bankruptcy or under any Debtor Relief Law.

(c)                 Interest Payment and Computation . Interest on each Base Rate Loan shall be due and payable in arrears on the last Business Day of each calendar quarter commencing December 31, 2014; and interest on each LIBOR Rate Loan shall be due and payable on the last day of each Interest Period applicable thereto, and if such Interest Period extends over three (3) months, at the end of each three (3) month interval during such Interest Period. All computations of interest for Base Rate Loans when the Base Rate is determined by the Prime Rate shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest provided hereunder shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365/366-day year).

(d)                 Maximum Rate . In no contingency or event whatsoever shall the aggregate of all amounts deemed interest under this Agreement charged or collected pursuant to the terms of this Agreement exceed the highest rate permissible under any Applicable Law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto. In the event that such a court determines that the Lenders have charged or received interest hereunder in excess of the highest applicable rate, the rate in effect hereunder shall automatically be reduced to the maximum rate permitted by Applicable Law and the Lenders shall at the Administrative Agent’s option (i) promptly refund to the Borrower any interest received by the Lenders in excess of the maximum lawful rate or (ii) apply such excess to the principal balance of the Obligations. It is the intent hereof that the Borrower not pay or contract to pay, and that neither the Administrative Agent nor any Lender receive or contract to receive, directly or indirectly in any manner whatsoever, interest in excess of that which may be paid by the Borrower under Applicable Law.

SECTION 5.2                   Notice and Manner of Conversion or Continuation of Loans . Provided that no Default or Event of Default has occurred and is then continuing, the Borrower shall have the option to (a) convert at any time following the third Business Day after the Closing Date all or any portion of any outstanding Base Rate Loans (other than Swingline Loans) in a principal amount equal to $5,000,000 or any whole multiple of $1,000,000 in excess thereof into one or more LIBOR Rate Loans and (b) upon the expiration of any Interest Period, (i) convert all or any part of its outstanding LIBOR Rate Loans in a principal amount equal to $3,000,000 or a whole multiple of $1,000,000 in excess thereof into Base Rate

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Loans (other than Swingline Loans) or (ii) continue such LIBOR Rate Loans as LIBOR Rate Loans. Whenever the Borrower desires to convert or continue Loans as provided above, the Borrower shall give the Administrative Agent irrevocable prior written notice in the form attached as Exhibit E (a “ Notice of Conversion/Continuation ”) not later than 11:00 a.m. three (3) Business Days before the day on which a proposed conversion or continuation of such Loan is to be effective specifying (A) the Loans to be converted or continued, and, in the case of any LIBOR Rate Loan to be converted or continued, the last day of the Interest Period therefor, (B) the effective date of such conversion or continuation (which shall be a Business Day), (C) the principal amount of such Loans to be converted or continued, and (D) the Interest Period to be applicable to such converted or continued LIBOR Rate Loan; provided that if the Borrower wishes to request LIBOR Rate Loans having an Interest Period of twelve months in duration, such notice must be received by the Administrative Agent not later than 11:00 a.m. four (4) Business Days prior to the requested date of such conversion or continuation, whereupon the Administrative Agent shall give prompt notice to the applicable Lenders of such request and determine whether the requested Interest Period is acceptable to all of them. If the Borrower fails to give a timely Notice of Conversion/Continuation prior to the end of the Interest Period for any LIBOR Rate Loan, then the applicable LIBOR Rate Loan shall be converted to a Base Rate Loan. Any such automatic conversion to a Base Rate Loan shall be effective as of the last day of the Interest Period then in effect with respect to the applicable LIBOR Rate Loan. If the Borrower requests a conversion to, or continuation of, LIBOR Rate Loans, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month. Notwithstanding anything to the contrary herein, a Swingline Loan may not be converted to a LIBOR Rate Loan. The Administrative Agent shall promptly notify the affected Lenders of such Notice of Conversion/Continuation.

SECTION 5.3                   Fees .

(a)                 Commitment Fee . Commencing on the Closing Date, subject to Section 5.15(a)(iii)(A) , the Borrower shall pay to the Administrative Agent, for the account of the Revolving Credit Lenders, a non-refundable commitment fee (the “ Commitment Fee ”) at a rate per annum equal to the Applicable Margin on the average daily unused portion of the Revolving Credit Commitment of the Revolving Credit Lenders (other than the Defaulting Lenders, if any); provided , that the amount of outstanding Swingline Loans shall not be considered usage of the Revolving Credit Commitment for the purpose of calculating the Commitment Fee. The Commitment Fee shall be payable in arrears on the last Business Day of each calendar quarter during the term of this Agreement commencing December 31, 2014 and ending on the date upon which all Obligations (other than inchoate indemnification obligations and any other obligations which pursuant to the terms of any Loan Document specifically survive repayment of the Loans for which no claim has been made) arising under the Revolving Credit Facility shall have been indefeasibly and irrevocably paid and satisfied in full, all Letters of Credit have been terminated or expired (or been Cash Collateralized or other arrangements made therefor satisfactory to the Issuing Bank) and the Revolving Credit Commitment has been terminated. The Commitment Fee shall be distributed by the Administrative Agent to the Revolving Credit Lenders (other than any Defaulting Lender) pro rata in accordance with such Revolving Credit Lenders’ respective Revolving Credit Commitment Percentages.

(b)                 Other Fees . The Borrower shall pay to the Arranger and the Administrative Agent for their own respective accounts fees in the amounts and at the times specified in their Fee Letter. The Borrower shall pay to the Lenders such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified.

SECTION 5.4                   Manner of Payment . Each payment by the Borrower on account of the principal of or interest on the Loans or of any fee, commission or other amounts (including the Reimbursement Obligation) payable to the Lenders under this Agreement shall be made not later than

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1:00 p.m. on the date specified for payment under this Agreement to the Administrative Agent at the Administrative Agent’s Office for the account of the Lenders entitled to such payment in Dollars, in immediately available funds and shall be made without any set off, counterclaim or deduction whatsoever. Any payment received after such time but before 2:00 p.m. on such day shall be deemed a payment on such date for the purposes of Section 10.1 , but for all other purposes shall be deemed to have been made on the next succeeding Business Day. Any payment received after 2:00 p.m. shall be deemed to have been made on the next succeeding Business Day for all purposes. Upon receipt by the Administrative Agent of each such payment, the Administrative Agent shall distribute to each such Lender at its address for notices set forth herein its Commitment Percentage in respect of the relevant Credit Facility (or other applicable share as provided herein) of such payment and shall wire advice of the amount of such credit to each Lender. Each payment to the Administrative Agent on account of the principal of or interest on the Swingline Loans or of any fee, commission or other amounts payable to the Swingline Lender shall be made in like manner, but for the account of the Swingline Lender. Each payment to the Administrative Agent of any Issuing Lender’s fees or L/C Participants’ commissions shall be made in like manner, but for the account of such Issuing Lender or the L/C Participants, as the case may be. Each payment to the Administrative Agent of Administrative Agent’s fees or expenses shall be made for the account of the Administrative Agent and any amount payable to any Lender under Sections 5.9 , 5.10 , 5.11 or 12.3 shall be paid to the Administrative Agent for the account of the applicable Lender. Subject to the definition of Interest Period, if any payment under this Agreement shall be specified to be made upon a day which is not a Business Day, it shall be made on the next succeeding day which is a Business Day and such extension of time shall in such case be included in computing any interest if payable along with such payment. Notwithstanding the foregoing, if there exists a Defaulting Lender each payment by the Borrower to such Defaulting Lender hereunder shall be applied in accordance with Section 5.15(a)(ii) .

SECTION 5.5                   Evidence of Indebtedness .

(a)                 Extensions of Credit . The Extensions of Credit made by each Lender and each Issuing Lender shall be evidenced by one or more accounts or records maintained by such Lender or such Issuing Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender or the applicable Issuing Lender shall be conclusive absent manifest error of the amount of the Extensions of Credit made by the Lenders or such Issuing Lender to the Borrower and its Subsidiaries and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender or any Issuing Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the Administrative Agent) a Revolving Credit Note, Term Loan Note and/or Swingline Note, as applicable, which shall evidence such Lender’s Revolving Credit Loans, Term Loans and/or Swingline Loans, as applicable, in addition to such accounts or records. Each Lender may attach schedules to its Notes and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto.

(b)                 Participations . In addition to the accounts and records referred to in subsection (a), each Revolving Credit Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Revolving Credit Lender of participations in Letters of Credit and Swingline Loans. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Revolving Credit Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

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SECTION 5.6                   Sharing of Payments by Lenders . If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender’s receiving payment of a proportion of the aggregate amount of its Loans and accrued interest thereon or other such obligations (other than pursuant to Sections 5.9 , 5.10 , 5.11 or 12.3 ) greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them; provided that:

(i)                   if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and

(ii)                 the provisions of this paragraph shall not be construed to apply to (A) any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (B) the application of Cash Collateral provided for in Section 5.14 or (C) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Loans or participations in Swingline Loans and Letters of Credit to any assignee or participant, other than to the Borrower or any of its Subsidiaries or Affiliates (as to which the provisions of this paragraph shall apply).

Each Credit Party consents to the foregoing and agrees, to the extent it may effectively do so under Applicable Law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against each Credit Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of each Credit Party in the amount of such participation.

SECTION 5.7                   Administrative Agent’s Clawback .

(a)                 Funding by Lenders; Presumption by Administrative Agent . Unless the Administrative Agent shall have received notice from a Lender (i) in the case of Base Rate Loans, not later than 12:00 noon on the date of any proposed borrowing and (ii) otherwise, prior to the proposed date of any borrowing that such Lender will not make available to the Administrative Agent such Lender’s share of such borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Sections 2.3(b) and 4.2 and may, in reliance upon such assumption, make available to the Borrower a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable borrowing available to the Administrative Agent, then the applicable Lender and the Borrower severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount with interest thereon, for each day from and including the date such amount is made available to the Borrower to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of the daily average Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation and (B) in the case of a payment to be made by the Borrower, the interest rate applicable to Base Rate Loans. If the Borrower and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrower the amount of such interest paid by the Borrower for such period. If such Lender pays its share of the applicable borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender’s Loan included in such borrowing. Any payment by the Borrower shall be without prejudice to any claim

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the Borrower may have against a Lender that shall have failed to make such payment to the Administrative Agent.

(b)                 Payments by the Borrower; Presumptions by Administrative Agent . Unless the Administrative Agent shall have received notice from the Borrower prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders, the Issuing Lender or the Swingline Lender hereunder that the Borrower will not make such payment, the Administrative Agent may assume that the Borrower has made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders, the Issuing Lender or the Swingline Lender, as the case may be, the amount due. In such event, if the Borrower has not in fact made such payment, then each of the Lenders, the Issuing Lender or the Swingline Lender, as the case maybe, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender, Issuing Lender or the Swingline Lender, with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

(c)                 Nature of Obligations of Lenders Regarding Extensions of Credit . The obligations of the Lenders under this Agreement to make the Loans and issue or participate in Letters of Credit are several and are not joint or joint and several. The failure of any Lender to make available its Commitment Percentage of any Loan requested by the Borrower shall not relieve it or any other Lender of its obligation, if any, hereunder to make its Commitment Percentage of such Loan available on the borrowing date, but no Lender shall be responsible for the failure of any other Lender to make its Commitment Percentage of such Loan available on the borrowing date.

SECTION 5.8                   Changed Circumstances .

(a)                 Circumstances Affecting LIBOR Rate Availability . In connection with any request for a LIBOR Rate Loan or a conversion to or continuation thereof, if for any reason (i) the Administrative Agent shall determine (which determination shall be conclusive and binding absent manifest error) that Dollar deposits are not being offered to banks in the London interbank Eurodollar market for the applicable amount and Interest Period of such Loan, (ii) the Administrative Agent shall determine (which determination shall be conclusive and binding absent manifest error) that reasonable and adequate means do not exist for the ascertaining the LIBOR Rate for such Interest Period with respect to a proposed LIBOR Rate Loan or (iii) the Required Lenders shall determine (which determination shall be conclusive and binding absent manifest error) that the LIBOR Rate does not adequately and fairly reflect the cost to such Lenders of making or maintaining such Loans during such Interest Period, then the Administrative Agent shall promptly give notice thereof to the Borrower. Thereafter, until the Administrative Agent notifies the Borrower that such circumstances no longer exist, the obligation of the Lenders to make LIBOR Rate Loans and the right of the Borrower to convert any Loan to or continue any Loan as a LIBOR Rate Loan shall be suspended, and the Borrower shall either (A) repay in full (or cause to be repaid in full) the then outstanding principal amount of each such LIBOR Rate Loan together with accrued interest thereon (subject to Section 5.1(d) ), on the last day of the then current Interest Period applicable to such LIBOR Rate Loan; or (B) convert the then outstanding principal amount of each such LIBOR Rate Loan to a Base Rate Loan as of the last day of such Interest Period.

(b)                 Laws Affecting LIBOR Rate Availability . If, after the date hereof, the introduction of, or any change in, any Applicable Law or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or compliance by any of the Lenders (or any of their respective Lending Offices) with any request or directive (whether or not having the force of law) of any such Governmental

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Authority, central bank or comparable agency, shall make it unlawful or impossible for any of the Lenders (or any of their respective Lending Offices) to honor its obligations hereunder to make or maintain any LIBOR Rate Loan, such Lender shall promptly give notice thereof to the Administrative Agent and the Administrative Agent shall promptly give notice to the Borrower and the other Lenders. Thereafter, until the Administrative Agent notifies the Borrower that such circumstances no longer exist, (i) the obligations of the Lenders to make LIBOR Rate Loans, and the right of the Borrower to convert any Loan to a LIBOR Rate Loan or continue any Loan as a LIBOR Rate Loan shall be suspended and thereafter the Borrower may select only Base Rate Loans and (ii) if any of the Lenders may not lawfully continue to maintain a LIBOR Rate Loan to the end of the then current Interest Period applicable thereto, the applicable Loan shall immediately be converted to a Base Rate Loan for the remainder of such Interest Period.

SECTION 5.9                   Indemnity . The Borrower hereby indemnifies each of the Lenders against any loss or expense (including any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain a LIBOR Rate Loan or from fees payable to terminate the deposits from which such funds were obtained) which may arise or be attributable to each Lender’s obtaining, liquidating or employing deposits or other funds acquired to effect, fund or maintain any Loan (a) as a consequence of any failure by the Borrower to make any payment when due of any amount due hereunder in connection with a LIBOR Rate Loan, (b) due to any failure of the Borrower to borrow, continue or convert on a date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation or (c) due to any payment, prepayment or conversion of any LIBOR Rate Loan on a date other than the last day of the Interest Period therefor. The amount of such loss or expense shall be determined, in the applicable Lender’s sole discretion, based upon the assumption that such Lender funded its Commitment Percentage of the LIBOR Rate Loans in the London interbank market and using any reasonable attribution or averaging methods which such Lender deems appropriate and practical. A certificate of such Lender setting forth the basis for determining such amount or amounts necessary to compensate such Lender shall be forwarded to the Borrower through the Administrative Agent and shall be conclusively presumed to be correct save for manifest error.

SECTION 5.10               Increased Costs .

(a)                 Increased Costs Generally . If any Change in Law shall:

(i)                   impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or advances, loans or other credit extended or participated in by, any Lender (except any reserve requirement reflected in the LIBOR Rate) or any Issuing Lender;

(ii)                 subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

(iii)                impose on any Lender or any Issuing Lender or the London interbank market any other condition, cost or expense (other than Taxes) affecting this Agreement or LIBOR Rate Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender, the Issuing Lender or such other Recipient of making, converting to, continuing or maintaining any Loan (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender, such Issuing Lender or such other Recipient of participating in, issuing or maintaining any Letter of Credit (or of maintaining its

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obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender, such Issuing Lender or such other Recipient hereunder (whether of principal, interest or any other amount) then, upon written request of such Lender, such Issuing Lender or other Recipient, the Borrower shall promptly pay to any such Lender, such Issuing Lender or other Recipient, as the case may be, such additional amount or amounts as will compensate such Lender, such Issuing Lender or other Recipient, as the case may be, for such additional costs incurred or reduction suffered.

(b)                 Capital Requirements . If any Lender or any Issuing Lender determines that any Change in Law affecting such Lender or such Issuing Lender or any lending office of such Lender or such Lender’s or such Issuing Lender’s holding company, if any, regarding capital or liquidity requirements, has or would have the effect of reducing the rate of return on such Lender’s or such Issuing Lender’s capital or on the capital of such Lender’s or such Issuing Lender’s holding company, if any, as a consequence of this Agreement, the Revolving Credit Commitment of such Lender or the Loans made by, or participations in Letters of Credit or Swingline Loans held by, such Lender, or the Letters of Credit issued by such Issuing Lender, to a level below that which such Lender or such Issuing Lender or such Lender’s or such Issuing Lender’s holding company could have achieved but for such Change in Law (taking into consideration such Lender’s or such Issuing Lender’s policies and the policies of such Lender’s or such Issuing Lender’s holding company with respect to capital adequacy), then from time to time upon written request of such Lender or such Issuing Lender the Borrower shall promptly pay to such Lender or such Issuing Lender, as the case may be, such additional amount or amounts as will compensate such Lender or such Issuing Lender or such Lender’s or such Issuing Lender’s holding company for any such reduction suffered.

(c)                 Certificates for Reimbursement . A certificate of a Lender, or an Issuing Lender or such other Recipient setting forth in reasonable detail the amount or amounts necessary to compensate such Lender or such Issuing Lender, such other Recipient or any of their respective holding companies, as the case may be, as specified in paragraph (a) or (b) of this Section and delivered to the Borrower, shall be conclusive absent manifest error. The Borrower shall pay such Lender or such Issuing Lender or such other Recipient, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.

(d)                 Delay in Requests . Failure or delay on the part of any Lender or any Issuing Lender or such other Recipient to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or such Issuing Lender’s or such other Recipient’s right to demand such compensation; provided that the Borrower shall not be required to compensate any Lender or an Issuing Lender or any other Recipient pursuant to this Section for any increased costs incurred or reductions suffered more than nine (9) months prior to the date that such Lender or such Issuing Lender or such other Recipient, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions, and of such Lender’s or such Issuing Lender’s or such other Recipient’s intention to claim compensation therefor (except that if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

SECTION 5.11               Taxes .

(a)                 Defined Terms . For purposes of this Section 5.11 , the term “Lender” includes any Issuing Lender and the term “Applicable Law” includes FATCA.

(b)                 Payments Free of Taxes . Any and all payments by or on account of any obligation of any Credit Party under any Loan Document shall be made without deduction or withholding for any Taxes,

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except as required by Applicable Law. If any Applicable Law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with Applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the applicable Credit Party shall be increased as necessary so that, after such deduction or withholding for Indemnified Taxes has been made (including such deductions and withholdings for Indemnified Taxes applicable to additional sums payable under this Section), the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding for Indemnified Taxes been made.

(c)                 Payment of Other Taxes by the Credit Parties . The Credit Parties shall timely pay to the relevant Governmental Authority in accordance with Applicable Law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.

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

(e)                 Indemnification by the Lenders . Each Lender and each Issuing Lender shall severally indemnify the Administrative Agent, within ten (10) days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender or Issuing Lender (but only to the extent that any Credit Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Credit Parties to do so), (ii) any Taxes attributable to such Lender’s or Issuing Lender’s failure to comply with the provisions of Section 12.9(d) relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to any Lender or Issuing Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender and each Issuing Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender or Issuing Lender from any other source against any amount due to the Administrative Agent under this paragraph (e).

(f)                  Evidence of Payments . As soon as practicable after any payment of Taxes by any Credit Party to a Governmental Authority pursuant to this Section 5.11 , such Credit Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.

(g)                 Status of Lenders .

(i)                   Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the

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Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 5.11(g)(ii)(A) , (ii)(B) and (ii)(D) below) shall not be required if in the Lender’s reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(ii)                 Without limiting the generality of the foregoing:

(A)               Any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt from United States federal backup withholding tax;

(B)               any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:

(1) in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of, United States federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable, establishing an exemption from, or reduction of, United States federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(2) executed originals of IRS Form W-8ECI;

(3) in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit H-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “ U.S. Tax Compliance Certificate ”) and

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(y) executed originals of IRS Form W-8BEN or IRS Form W-8BEN-E, as applicable; or

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

(C)               any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of any other form prescribed by Applicable Law as a basis for claiming exemption from or a reduction in United States federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by Applicable Law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and

(D)               if a payment made to a Lender under any Loan Document would be subject to United States federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender’s obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.

(h)                 Treatment of Certain Refunds . If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section 5.11 (including by the payment of additional amounts pursuant to this Section 5.11 ), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund). Such indemnifying party, upon the

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request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (h) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this paragraph (h), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (h) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid. This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

(i)                   Survival . Each party’s obligations under this Section 5.11 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.

SECTION 5.12               Mitigation Obligations; Replacement of Lenders .

(a)                 Designation of a Different Lending Office . If any Lender requests compensation under Section 5.10 , or requires the Borrower to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 5.11 , then such Lender shall, at the request of the Borrower, use reasonable efforts to designate a different lending office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the reasonable judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 5.10 or Section 5.11 , as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment.

(b)                 Replacement of Lenders . If any Lender requests compensation under Section 5.10 , or if the Borrower is required to pay any Indemnified Taxes or additional amounts to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 5.11 , and, in each case, such Lender has declined or is unable to designate a different lending office in accordance with Section 5.12(a) , or if any Lender is a Defaulting Lender or a Non-Consenting Lender, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 12.9 ), all of its interests, rights (other than its existing rights to payments pursuant to Section 5.10 or Section 5.11 ) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that:

(i)                   the Borrower shall have paid to the Administrative Agent the assignment fee (if any) specified in Section 12.9 (unless such fee is waived by the Administrative Agent);

(ii)                 such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in Letters of Credit, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 5.9 ) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other amounts);

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(iii)                in the case of any such assignment resulting from a claim for compensation under Section 5.10 or payments required to be made pursuant to Section 5.11 , such assignment will result in a reduction in such compensation or payments thereafter;

(iv)               such assignment does not conflict with Applicable Law; and

(v)                 in the case of any assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and delegation cease to apply.

SECTION 5.13               Incremental Loans .

(a)                 At any time, the Borrower may by written notice to the Administrative Agent elect to request the establishment of:

(i)                   one or more incremental term loan commitments (any such incremental term loan commitment, an “ Incremental Term Loan Commitment ”) to make one or more additional term loans (any such additional term loan, an “ Incremental Term Loan ”); or

(ii)                 one or more increases in the Revolving Credit Commitments (any such increase, an “ Incremental Revolving Credit Commitment ” and, together with the Incremental Term Loan Commitments, the “ Incremental Loan Commitments ”) to make revolving credit loans under the Revolving Credit Facility (any such increase, an “ Incremental Revolving Credit Increase ” and, together with the Incremental Term Loans, the “ Incremental Loans ”);

provided that (1) the total aggregate principal amount for all such Incremental Loan Commitments when combined with the aggregate outstanding principal amount of Additional Pari Passu Debt shall not (as of any date of incurrence thereof) exceed $250,000,000 or, if greater, an amount equal to the principal amount of additional Indebtedness that would cause the Consolidated Total Net Leverage Ratio as of the four (4) consecutive fiscal quarter period most recently ended prior to the incurrence of such additional Indebtedness, calculated on a Pro Forma Basis after giving effect to the incurrence of such additional Indebtedness (assuming any Incremental Revolving Credit Commitment is fully drawn but without netting the cash proceeds of such Indebtedness), not to exceed 2.50 to 1.00 and (2) the total aggregate amount for each Incremental Loan Commitment (and the Incremental Loans made thereunder) shall not be less than a minimum principal amount of $100,000,000 or, if less, the remaining amount permitted pursuant to the foregoing clause (1). Each such notice shall specify the date (each, an “ Increased Amount Date ”) on which the Borrower proposes that any Incremental Loan Commitment shall be effective, which shall be a date not less than ten (10) Business Days after the date on which such notice is delivered to Administrative Agent. The Borrower may invite any Lender, any Affiliate of any Lender and/or any Approved Fund, and/or any other Person reasonably satisfactory to the Administrative Agent, to provide an Incremental Loan Commitment (any such Person, an “ Incremental Lender ”). Any proposed Incremental Lender offered or approached to provide all or a portion of any Incremental Loan Commitment may elect or decline, in its sole discretion, to provide such Incremental Loan Commitment. Any Incremental Loan Commitment shall become effective as of such Increased Amount Date; provided that:

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(A)               no Default or Event of Default shall exist on such Increased Amount Date before or after giving effect to (1) any Incremental Loan Commitment, (2) the making of any Incremental Loans pursuant thereto and (3) any Permitted Acquisition consummated in connection therewith;

(B)               the Administrative Agent and the Lenders shall have received from the Borrower an Officer’s Compliance Certificate demonstrating, in form and substance reasonably satisfactory to the Administrative Agent, that the Borrower is in compliance with the financial covenants set forth in Section 9.15 based on the financial statements most recently delivered pursuant to Section 8.1(a) or 8.1(b) , as applicable, both before and after giving effect (on a Pro Forma Basis) to (x) any Incremental Loan Commitment, (y) the making of any Incremental Loans pursuant thereto (with any Incremental Loan Commitment being deemed to be fully funded but without netting the cash proceeds received in connection with any Incremental Loan Commitment) and (z) any Permitted Acquisition consummated in connection therewith;

(C)               each of the representations and warranties contained in Article VII shall be true and correct in all material respects, except to the extent any such representation and warranty is qualified by materiality or reference to Material Adverse Effect, in which case, such representation and warranty shall be true and correct in all respects, on such Increased Amount Date with the same effect as if made on and as of such date (except for any such representation and warranty that by its terms is made only as of an earlier date, which representation and warranty shall remain true and correct as of such earlier date);

(D)               the proceeds of any Incremental Loans shall be used for working capital or general corporate purposes of the Borrower and its Subsidiaries (including Permitted Acquisitions);

(E)                each Incremental Loan Commitment (and the Incremental Loans made thereunder) shall constitute Obligations of the Borrower and shall be secured and guaranteed with the other Extensions of Credit on a pari passu basis;

(F)               (1) in the case of each Incremental Term Loan (the terms of which shall be set forth in the relevant Lender Joinder Agreement):

(x) such Incremental Term Loan will mature and amortize in a manner reasonably acceptable to the Incremental Lenders making such Incremental Term Loan and the Borrower, but will not in any event have a shorter weighted average life to maturity than the remaining weighted average life to maturity of the Initial Term Loan or a maturity date earlier than the Term Loan Maturity Date;

(y) the Applicable Margin and pricing grid, if applicable, for such Incremental Term Loan shall be determined by the applicable Incremental Lenders and the Borrower on the applicable Increased Amount Date; provided that if the Applicable Margin in respect of any Incremental Term Loan exceeds the Applicable Margin for the Initial Term Loan by more than 0.50%, then the Applicable Margin for the Initial Term Loan shall be increased so that the Applicable Margin in respect of such Initial Term Loan is equal to the Applicable Margin for the Incremental Term Loan minus 0.50%; provided further in determining the Applicable Margin(s) applicable to each Incremental Term Loan

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and the Applicable Margin(s) for the Initial Term Loan, (AA) original issue discount (“ OID ”) or upfront fees (which shall be deemed to constitute like amounts of OID) payable by the Borrower to the Lenders under such Incremental Term Loan or the Initial Term Loan in the initial primary syndication thereof shall be included (with OID being equated to interest based on assumed four-year life to maturity) and (BB) customary arrangement or commitment fees payable to any arranger (or its affiliates) in connection with the Initial Term Loan or to one or more arrangers (or their affiliates) of any Incremental Term Loan shall be excluded (it being understood that the effects of any and all interest rate floors shall be included in determining Applicable Margin(s) under this provision); and

(z) except as provided above, all other terms and conditions applicable to any Incremental Term Loan, to the extent not materially consistent with the terms and conditions applicable to the Initial Term Loan, shall be reasonably satisfactory to the Administrative Agent and the Borrower;

(2) in the case of each Incremental Revolving Credit Increase (the terms of which shall be set forth in the relevant Lender Joinder Agreement):

(x) such Incremental Revolving Credit Increase shall mature on the Revolving Credit Maturity Date, shall bear interest and be entitled to fees, in each case at the rate applicable to the Revolving Credit Loans, and shall be subject to the same terms and conditions as the Revolving Credit Loans;

(y) the outstanding Revolving Credit Loans and Revolving Credit Commitment Percentages of Swingline Loans and L/C Obligations will be reallocated by the Administrative Agent on the applicable Increased Amount Date among the Revolving Credit Lenders (including the Incremental Lenders providing such Incremental Revolving Credit Increase) in accordance with their revised Revolving Credit Commitment Percentages (and the Revolving Credit Lenders (including the Incremental Lenders providing such Incremental Revolving Credit Increase) agree to make all payments and adjustments necessary to effect such reallocation and the Borrower shall pay any and all costs required pursuant to Section 5.9 in connection with such reallocation as if such reallocation were a repayment); and

(z) except as provided above, all of the other terms and conditions applicable to such Incremental Revolving Credit Increase shall, except to the extent otherwise provided in this Section 5.13 , be identical to the terms and conditions applicable to the Revolving Credit Facility;

(G)              (1) any Incremental Lender making any Incremental Term Loan shall be entitled to the same voting rights as the existing Term Loan Lenders under the Term Loan Facility and each Incremental Term Loan shall receive proceeds of prepayments on the same basis as the Initial Term Loan (such prepayments to be shared pro rata on the basis of the original aggregate funded amount thereof among the Initial Term Loan and the Incremental Term Loans); and

(2) any Incremental Lender with an Incremental Revolving Credit Increase shall be entitled to the same voting rights as the existing Revolving Credit Lenders under the Revolving Credit Facility and any Extensions of Credit made in connection with each

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Incremental Revolving Credit Increase shall receive proceeds of prepayments on the same basis as the other Revolving Credit Loans made hereunder;

(H)               such Incremental Loan Commitments shall be effected pursuant to one or more Lender Joinder Agreements executed and delivered by the Borrower, the Administrative Agent and the applicable Incremental Lenders (which Lender Joinder Agreement may, without the consent of any other Lenders, effect such amendments to this Agreement and the other Loan Documents as may be necessary or appropriate, in the opinion of the Administrative Agent, to effect the provisions of this Section 5.13 ); and

(I)                  the Borrower shall deliver or cause to be delivered any customary legal opinions or other documents (including, without limitation, a resolution duly adopted by the board of directors (or equivalent governing body) of each Credit Party authorizing such Incremental Loan and/or Incremental Term Loan Commitment) reasonably requested by Administrative Agent in connection with any such transaction.

(b)                 (i) The Incremental Term Loans shall be deemed to be Term Loans; provided that such Incremental Term Loan shall be designated as a separate tranche of Term Loans for all purposes of this Agreement.

(ii)                 The Incremental Lenders shall be included in any determination of the Required Lenders, and, unless otherwise agreed, the Incremental Lenders will not constitute a separate voting class for any purposes under this Agreement.

(c)                 (i) On any Increased Amount Date on which any Incremental Term Loan Commitment becomes effective, subject to the foregoing terms and conditions, each Incremental Lender with an Incremental Term Loan Commitment shall make, or be obligated to make, an Incremental Term Loan to the Borrower in an amount equal to its Incremental Term Loan Commitment and shall become a Term Loan Lender hereunder with respect to such Incremental Term Loan Commitment and the Incremental Term Loan made pursuant thereto.

(ii)                 On any Increased Amount Date on which any Incremental Revolving Credit Increase becomes effective, subject to the foregoing terms and conditions, each Incremental Lender with an Incremental Revolving Credit Commitment shall become a Revolving Credit Lender hereunder with respect to such Incremental Revolving Credit Commitment.

SECTION 5.14               Cash Collateral . At any time that there shall exist a Defaulting Lender, within one Business Day following the written request of the Administrative Agent, any Issuing Lender (with a copy to the Administrative Agent) or the Swingline Lender (with a copy to the Administrative Agent), the Borrower shall Cash Collateralize the Fronting Exposure of such Issuing Lender and/or the Swingline Lender, as applicable, with respect to such Defaulting Lender (determined after giving effect to Section 5.15(a)(iv) and any Cash Collateral provided by such Defaulting Lender) in an amount not less than the Minimum Collateral Amount.

(a)                 Grant of Security Interest . The Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to the Administrative Agent, for the benefit of each Issuing Lender and the Swingline Lender, and agrees to maintain, a first priority security interest in all such Cash Collateral as security for the Defaulting Lender’s obligation to fund participations in respect of L/C Obligations and Swingline Loans, to be applied pursuant to subsection (b) below. If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent, each Issuing Lender and the Swingline Lender as herein provided, or that

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the total amount of such Cash Collateral is less than the Minimum Collateral Amount, the Borrower will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency (after giving effect to any Cash Collateral provided by the Defaulting Lender).

(b)                 Application . Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under this Section 5.14 or Section 5.15 in respect of Letters of Credit and Swingline Loans shall be applied to the satisfaction of the Defaulting Lender’s obligation to fund participations in respect of L/C Obligations and Swingline Loans (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

(c)                 Termination of Requirement . Cash Collateral (or the appropriate portion thereof) provided to reduce the Fronting Exposure of any Issuing Lender and/or the Swingline Lender, as applicable, shall no longer be required to be held as Cash Collateral pursuant to this Section 5.14 following (i) the elimination of the applicable Fronting Exposure (including by the termination of Defaulting Lender status of the applicable Lender), or (ii) the determination by the Administrative Agent, the Issuing Lenders and the Swingline Lender that there exists excess Cash Collateral; provided that, subject to Section 5.15 , the Person providing Cash Collateral, the Issuing Lenders and the Swingline Lender may agree that Cash Collateral shall be held to support future anticipated Fronting Exposure or other obligations; and provided further that to the extent that such Cash Collateral was provided by the Borrower, such Cash Collateral shall remain subject to the security interest granted pursuant to the Loan Documents.

SECTION 5.15               Defaulting Lenders .

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

(i)                   Waivers and Amendments . Such Defaulting Lender’s right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of Required Lenders and Section 12.2 .

(ii)                 Defaulting Lender Waterfall . Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article X or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 12.4 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first , to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second , to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the Issuing Lenders or the Swingline Lender hereunder; third , to Cash Collateralize the Fronting Exposure of the Issuing Lenders and the Swingline Lender with respect to such Defaulting Lender in accordance with Section 5.14 ; fourth , as the Borrower may request (so long as no Default or Event of Default exists), to the funding of any Loan or funded participation in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth , if so determined by the Administrative Agent and the Borrower, to be held in a deposit account and released pro rata in order to (A) satisfy such Defaulting Lender’s potential future funding obligations with respect to Loans and funded participations under this Agreement and (B) Cash Collateralize the Issuing Lenders’ future Fronting Exposure with respect to such Defaulting Lender with respect to future

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Letters of Credit and Swingline Loans issued under this Agreement, in accordance with Section 5.14 ; sixth , to the payment of any amounts owing to the Lenders, the Issuing Lenders or the Swingline Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, any Issuing Lender or the Swingline Lender against such Defaulting Lender as a result of such Defaulting Lender’s breach of its obligations under this Agreement; seventh , so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrower as a result of any judgment of a court of competent jurisdiction obtained by the Borrower against such Defaulting Lender as a result of such Defaulting Lender's breach of its obligations under this Agreement; and eighth , to such Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (1) such payment is a payment of the principal amount of any Loans or funded participations in Letters of Credit or Swingline Loans in respect of which such Defaulting Lender has not fully funded its appropriate share, and (2) such Loans were made or the related Letters of Credit or Swingline Loans were issued at a time when the conditions set forth in Section 6.2 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and funded participations in Letters of Credit or Swingline Loans owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or funded participations in Letters of Credit or Swingline Loans owed to, such Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations and Swingline Loans are held by the Lenders pro rata in accordance with the Revolving Credit Commitments under the applicable Revolving Credit Facility without giving effect to Section 5.15(a)(iv) . Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 5.15(a)(ii) shall be deemed paid to and redirected by such Defaulting Lender, and each Lender irrevocably consents hereto.

(iii)                Certain Fees .

(A)               No Defaulting Lender shall be entitled to receive any Commitment Fee for any period during which that Lender is a Defaulting Lender (and the Borrower shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

(B)               Each Defaulting Lender shall be entitled to receive letter of credit commissions pursuant to Section 3.3 for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Revolving Credit Commitment Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 5.14 .

(C)               With respect to any Commitment Fee or letter of credit commission not required to be paid to any Defaulting Lender pursuant to clause (A) or (B) above, the Borrower shall (1) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender’s participation in L/C Obligations or Swingline Loans that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (2) pay to each applicable Issuing Lender and Swingline Lender, as applicable, the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such Issuing Lender’s or Swingline Lender’s Fronting Exposure to such Defaulting Lender, and (3) not be required to pay the remaining amount of any such fee.

(iv)               Reallocation of Participations to Reduce Fronting Exposure . All or any part of such Defaulting Lender’s participation in L/C Obligations and Swingline Loans shall be

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reallocated among the Non-Defaulting Lenders in accordance with their respective Revolving Credit Commitment Percentages (calculated without regard to such Defaulting Lender’s Revolving Credit Commitment) but only to the extent that (x) the conditions set forth in Section 6.2 (other than clause (d) thereof) are satisfied at the time of such reallocation (and, so long as the Administrative Agent has provided notice to the Borrower of such reallocation, unless the Borrower shall have otherwise notified the Administrative Agent at such time, the Borrower shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the aggregate Revolving Credit Exposure of any Non-Defaulting Lender to exceed such Non-Defaulting Lender’s Revolving Credit Commitment. No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender’s increased exposure following such reallocation.

(v)                 Cash Collateral, Repayment of Swingline Loans . If the reallocation described in clause (iv) above cannot, or can only partially, be effected, the Borrower shall, without prejudice to any right or remedy available to it hereunder or under law, (x) first , repay Swingline Loans in an amount equal to the Swingline Lenders’ Fronting Exposure and (y) second , Cash Collateralize the Issuing Lenders’ Fronting Exposure in accordance with the procedures set forth in Section 5.14 .

(b)                 Defaulting Lender Cure . If the Borrower, the Administrative Agent, the Issuing Lenders and the Swingline Lender agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), such Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Loans and funded and unfunded participations in Letters of Credit and Swingline Loans to be held pro rata by the Lenders in accordance with the Commitments under the applicable Credit Facility (without giving effect to Section 5.15(a)(iv) ), whereupon such Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrower while that Lender was a Defaulting Lender; and provided , further , that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender.

ARTICLE VI

CONDITIONS OF CLOSING AND BORROWING

SECTION 6.1                   Conditions to Closing and Initial Extensions of Credit . The obligation of the Lenders to close this Agreement and to make the initial Loans or issue or participate in the initial Letter of Credit, if any, on the Closing Date is subject to the satisfaction of each of the following conditions:

(a)                 Executed Loan Documents . This Agreement, a Revolving Credit Note in favor of each Revolving Credit Lender requesting a Revolving Credit Note, a Term Loan Note in favor of each Term Loan Lender requesting a Term Loan Note, a Swingline Note in favor of the Swingline Lender (in each case, if requested thereby), the Security Documents required to be delivered on the Closing Date, together with any other applicable Loan Documents, shall have been duly authorized, executed and delivered to the Administrative Agent by the parties thereto, shall be in full force and effect and no Default or Event of Default shall exist hereunder or thereunder.

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(b)                 Closing Certificates; Etc. The Administrative Agent shall have received each of the following in form and substance reasonably satisfactory to the Administrative Agent:

(i)                   Officer’s Certificate . A certificate from a Responsible Officer of the Borrower to the effect that (A) all representations and warranties of the Credit Parties contained in this Agreement and the other Loan Documents are true and correct in all material respects (except to the extent any such representation and warranty is qualified by materiality or reference to Material Adverse Effect, in which case, such representation and warranty shall be true and correct in all respects); (B) none of the Credit Parties is in violation of any of the covenants contained in this Agreement and the other Loan Documents; (C) after giving effect to the Transactions, no Default or Event of Default has occurred and is continuing; (D) since July 31, 2014, no event has occurred or condition arisen, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect; and (E)  each of the Credit Parties, as applicable, has satisfied each of the conditions set forth in Section 6.1 and Section 6.2 .

(ii)                 Certificate of Secretary of each Credit Party . A certificate of a secretary, assistant secretary or other Responsible Officer of each Credit Party certifying as to the incumbency and genuineness of the signature of each officer of such Credit Party executing Loan Documents to which it is a party and certifying that attached thereto is a true, correct and complete copy of (A) the articles or certificate of incorporation or formation (or equivalent), as applicable, of such Credit Party and all amendments thereto, certified as of a recent date by the appropriate Governmental Authority in its jurisdiction of incorporation, organization or formation (or equivalent), as applicable, (B) the bylaws or other governing document of such Credit Party as in effect on the Closing Date, (C) resolutions duly adopted by the board of directors (or other governing body) of such Credit Party authorizing and approving the transactions contemplated hereunder and the execution, delivery and performance of this Agreement and the other Loan Documents to which it is a party, and (D) the certificate required to be delivered pursuant to Section 6.1(b)(iii) with respect to such Credit Party.

(iii)                Certificates of Good Standing . Certificates as of a recent date of the good standing of each Credit Party under the laws of its jurisdiction of incorporation, organization or formation (or equivalent), as applicable.

(iv)               Opinions of Counsel . Opinions of counsel to the Credit Parties addressed to the Administrative Agent, the Collateral Agent and the Lenders with respect to the Credit Parties, the Loan Documents and such other matters as the Administrative Agent shall request (which such opinions shall expressly permit reliance by permitted successors and assigns of the Administrative Agent, the Collateral Agent and the Lenders).

(c)                 Personal Property Collateral .

(i)                   Filings and Recordings . The Collateral Agent shall have received information necessary file UCC-1 financing statements in the jurisdictions of incorporation or formation of each Credit Party.

(ii)                 Pledged Collateral . The Collateral Agent shall have received original stock certificates or other certificates evidencing the certificated Equity Interests pledged pursuant to the Security Documents, together with an undated stock power for each such certificate duly executed in blank by the registered owner thereof.

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(iii)                Lien Search . The Collateral Agent shall have received the results of a Lien search (including a search as to judgments, pending litigation, bankruptcy, tax and intellectual property matters), in form and substance reasonably satisfactory thereto, made against the Credit Parties under the Uniform Commercial Code (or applicable judicial docket) as in effect in each jurisdiction in which filings or recordations under the Uniform Commercial Code should be made to evidence or perfect security interests in all assets of such Credit Party, indicating among other things that the assets of each such Credit Party are free and clear of any Lien (except for Permitted Liens).

(iv)               Property and Liability Insurance . The Collateral Agent shall have received, in each case in form and substance reasonably satisfactory to the Collateral Agent, evidence of property, business interruption and liability insurance covering each Credit Party (with appropriate endorsements naming the Collateral Agent as lender’s loss payee on all policies for property hazard insurance and as additional insured on all policies for liability insurance).

(d)                 [ Reserved] .

(e)                 Consents; Defaults .

(i)                   Governmental and Third Party Approvals . The Credit Parties shall have received all material governmental, shareholder and third party consents and approvals necessary (or any other material consents as determined in the reasonable discretion of the Administrative Agent) in connection with the transactions contemplated by this Agreement and the other Loan Documents and all applicable waiting periods shall have expired without any action being taken by any Person that could reasonably be expected to restrain, prevent or impose any material adverse conditions on any of the Credit Parties or such other transactions or that could seek or threaten any of the foregoing, and no law or regulation shall be applicable which in the reasonable judgment of the Administrative Agent could reasonably be expected to have such effect.

(ii)                 No Injunction, Etc. No action, proceeding or investigation shall have been instituted, threatened in writing or proposed before any Governmental Authority to enjoin, restrain, or prohibit, or to obtain substantial damages in respect of, or which is related to or arises out of this Agreement or the other Loan Documents or the consummation of the transactions contemplated hereby or thereby, or which, in the Administrative Agent’s sole discretion, would make it inadvisable to consummate the transactions contemplated by this Agreement or the other Loan Documents or the consummation of the transactions contemplated hereby or thereby.

(f)                  Financial Matters .

(i)                   Financial Condition/Solvency Certificate . The Borrower shall have delivered to the Administrative Agent a certificate, in form and substance satisfactory to the Administrative Agent, and certified as accurate by the chief financial officer of the Borrower, that (A) after giving effect to the Transactions, the Borrower and its Subsidiaries, taken as a whole, are Solvent and (B) attached thereto are calculations evidencing compliance on a Pro Forma Basis after giving effect to the Transactions with the covenants contained in Section 9.15 .

(ii)                 Payment at Closing . The Borrower shall have paid or made arrangements to pay contemporaneously with closing (A) to the Administrative Agent, the Arranger and the Lenders the fees set forth or referenced in Section 5.3 and any other accrued and unpaid fees or commissions due hereunder, (B) all fees, charges and disbursements of counsel to the Administrative Agent (directly to such counsel if requested by the Administrative Agent) to the

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extent invoiced, accrued and unpaid prior to or on the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings ( provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrower and the Administrative Agent) and (C) to any other Person such amount as may be due thereto in connection with the transactions contemplated hereby, including all taxes, fees and other charges in connection with the execution, delivery, recording, filing and registration of any of the Loan Documents.

(g)                 Private Placement Note Purchase Agreement and Intercreditor Agreement . The Borrower shall have contemporaneously executed and consummated one or more definitive note purchase agreements for the private placement Indebtedness in an aggregate principal amount not to exceed $400,000,000 on terms and conditions reasonably acceptable to the Administrative Agent (collectively, the “ Private Placement Note Purchase Agreement ”), including, without limitation, receipt of all regulatory, contractual and other approvals and consents necessary to consummate such Private Placement Note Purchase Agreement. With respect to the Indebtedness under the Private Placement Note Purchase Agreement, the Administrative Agent shall have received a fully executed and duly authorized, Intercreditor Agreement, in form and substance reasonably satisfactory to the Administrative Agent.

(h)                 Miscellaneous .

(i)                   Notice of Account Designation . The Administrative Agent shall have received a Notice of Account Designation specifying the account or accounts to which the proceeds of any Loans made on or after the Closing Date are to be disbursed.

(ii)                 Due Diligence . The Administrative Agent shall have completed, to its satisfaction, all legal, tax, environmental, business and other due diligence with respect to the business, assets, liabilities, operations and condition (financial or otherwise) of the Borrower and its Subsidiaries in scope and determination satisfactory to the Administrative Agent in its sole discretion.

(iii)                Existing Indebtedness . All existing Indebtedness of the Borrower and its Subsidiaries (including Indebtedness under the Existing Credit Agreement but excluding Indebtedness permitted pursuant to Section 9.1 ) shall be repaid in full, all commitments (if any) in respect thereof shall have been terminated and all guarantees therefor and security therefor shall be released, and the Administrative Agent shall have received pay-off letters in form and substance satisfactory to it evidencing such repayment, termination and release.

(iv)               [ Reserved ].

(v)                 PATRIOT Act, etc . The Borrower and each of the Guarantor shall have provided to the Administrative Agent and the Lenders, at least five (5) days prior to the Closing Date, the documentation and other information requested by the Administrative Agent in order to comply with requirements of the PATRIOT Act, applicable “know your customer” and anti-money laundering rules and regulations.

(vi)               Other Documents . All opinions, certificates and other instruments and all proceedings in connection with the transactions contemplated by this Agreement shall be satisfactory in form and substance to the Administrative Agent. The Administrative Agent shall have received copies of all other documents, certificates and instruments reasonably requested thereby, with respect to the transactions contemplated by this Agreement.

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Without limiting the generality of the provisions of the last paragraph of Section 11.3 , for purposes of determining compliance with the conditions specified in this Section 6.1 , the Administrative Agent and each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

SECTION 6.2                   Conditions to All Extensions of Credit . The obligations of the Lenders to make or participate in any Extensions of Credit (including the initial Extension of Credit) or any Issuing Lender to issue or extend any Letter of Credit are subject to the satisfaction of the following conditions precedent on the relevant borrowing issuance or extension date:

(a)                 Continuation of Representations and Warranties . The representations and warranties contained in this Agreement and the other Loan Documents shall be true and correct in all material respects, except for any representation and warranty that is qualified by materiality or reference to Material Adverse Effect, which such representation and warranty shall be true and correct in all respects, on and as of such borrowing issuance or extension date with the same effect as if made on and as of such date (except for any such representation and warranty that by its terms is made only as of an earlier date, which representation and warranty shall remain true and correct in all material respects as of such earlier date, except for any representation and warranty that is qualified by materiality or reference to Material Adverse Effect, which such representation and warranty shall be true and correct in all respects as of such earlier date).

(b)                 No Existing Default . No Default or Event of Default shall have occurred and be continuing (i) on the borrowing with respect to such Loan or after giving effect to the Loans to be made on such date or (ii) on the issuance or extension date with respect to such Letter of Credit or after giving effect to the issuance or extension of such Letter of Credit on such date.

(c)                 Notices . The Administrative Agent shall have received a Notice of Borrowing or Letter of Credit Application, as applicable, from the Borrower in accordance with Section 2.3(a) , Section 3.2 , Section 4.2 or Section 5.2 , as applicable.

(d)                 New Swingline Loans/Letters of Credit . So long as any Lender is a Defaulting Lender, (i) the Swingline Lender shall not be required to fund any Swingline Loans unless it is satisfied that it will have no Fronting Exposure after giving effect to such Swingline Loan and (ii) the Issuing Lender shall not be required to issue, extend, renew or increase any Letter of Credit unless it is satisfied that it will have no Fronting Exposure after giving effect thereto.

ARTICLE VII

REPRESENTATIONS AND WARRANTIES OF THE CREDIT PARTIES

To induce the Administrative Agent and Lenders to enter into this Agreement and to induce the Lenders to make Extensions of Credit, the Credit Parties hereby represent and warrant to the Administrative Agent and the Lenders both before and after giving effect to the transactions contemplated hereunder, which representations and warranties shall be deemed made on the Closing Date and as otherwise set forth in Section 6.2 , that:

SECTION 7.1                   Organization; Power; Qualification . Each Credit Party and each Subsidiary thereof (a) is duly organized or incorporated, validly existing and in good standing (or in the case of any Foreign Subsidiary, the equivalent status, if any, in the applicable foreign jurisdiction) under the laws of

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the jurisdiction of its incorporation or formation, (b) has the power and authority to own its Properties and to carry on its business as now being and hereafter proposed to be conducted and (c) is duly qualified and authorized to do business in each jurisdiction in which the character of its Properties or the nature of its business requires such qualification and authorization (to the extent applicable in the case of Foreign Subsidiaries) except in jurisdictions where the failure to be so qualified or in good standing could not reasonably be expected to result in a Material Adverse Effect. Each Credit Party and each Subsidiary as of the Closing Date, and the jurisdictions in which each Credit Party and each Subsidiary thereof are organized and qualified to do business as of the Closing Date, are listed on Schedule 7.1 to the Disclosure Letter.

SECTION 7.2                   Ownership . As of the Closing Date, the capitalization of each Credit Party (other than the Borrower) consists of the number of shares, authorized, issued and outstanding, of such classes and series, with or without par value, described on Schedule 7.2 to the Disclosure Letter. As of the Closing Date, all outstanding shares of each Subsidiary have been duly authorized and validly issued and, to the extent applicable, are fully paid and nonassessable and not subject to any preemptive or similar rights, except as described in Schedule 7.2 to the Disclosure Letter. As of the Closing Date, there are no outstanding stock purchase warrants, subscriptions, options, securities, instruments or other rights of any type or nature whatsoever, which are convertible into, exchangeable for or otherwise provide for or require the issuance of Equity Interests of any Subsidiary, except as described on Schedule 7.2 to the Disclosure Letter.

SECTION 7.3                   Authorization; Enforceability . Each Credit Party has the right, power and authority and has taken all necessary corporate and other action to authorize the execution, delivery and performance of this Agreement and each of the other Loan Documents to which it is a party in accordance with their respective terms. This Agreement and each of the other Loan Documents have been duly executed and delivered by the duly authorized officers of each Credit Party that is a party thereto, and each such document constitutes the legal, valid and binding obligation of each Credit Party that is a party thereto, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal Debtor Relief Laws from time to time in effect which affect the enforcement of creditors’ rights in general and the availability of equitable remedies (regardless of whether enforcement is sought in equity or at law).

SECTION 7.4                   Compliance of Agreement, Loan Documents and Borrowing with Laws, Etc. The execution, delivery and performance by each Credit Party of the Loan Documents to which each such Person is a party, in accordance with their respective terms, the Extensions of Credit hereunder and the transactions contemplated hereby or thereby do not and will not, by the passage of time, the giving of notice or otherwise, (a) require any Governmental Approval on the part of any Credit Party or violate any Applicable Law relating to any Credit Party or any Subsidiary thereof where the failure to obtain such Governmental Approval or such violation could reasonably be expected to have a Material Adverse Effect, (b) conflict with, result in a breach of or constitute a default under the articles of incorporation, bylaws or other organizational documents of any Credit Party, (c) conflict with, result in a breach of or constitute a default under any indenture, agreement or other instrument to which such Person is a party or by which any of its properties may be bound or any Governmental Approval relating to such Person, which could, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (d) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by such Person other than Permitted Liens or (e) require any consent or authorization of, filing with, or other act in respect of, an arbitrator or Governmental Authority and no consent of any other Person is required in connection with the execution, delivery, performance, validity or enforceability of this Agreement other than (i) consents, authorizations, filings or other acts or consents for which the failure to obtain or make could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect and (ii) consents or filings under the UCC.

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SECTION 7.5                   Compliance with Law; Governmental Approvals . Each Credit Party and each Subsidiary thereof (a) has all Governmental Approvals required by any Applicable Law for it to conduct its business, each of which is in full force and effect, (b) is in compliance with each Governmental Approval applicable to it and in compliance with all other Applicable Laws relating to it or any of its respective properties and (c) has timely filed all material reports, documents and other materials required to be filed by it under all Applicable Laws with any Governmental Authority and has retained all material records and documents required to be retained by it under Applicable Law except in each case (a), (b) or (c) where the failure to have, comply, file or retain could not reasonably be expected to have a Material Adverse Effect.

SECTION 7.6                   Tax Returns and Payments . Each Credit Party and each Subsidiary thereof has duly filed or caused to be filed all federal and all other material state, local and other tax returns required by Applicable Law to be filed, and has paid, or made adequate provision for the payment of, all federal and all other material state, local and other taxes, assessments and governmental charges or levies upon it and its property, income, profits and assets which are due and payable (other than any amount the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided for on the books of the relevant Credit Party). Such returns accurately reflect in all material respects all liability for taxes of any Credit Party or any Subsidiary thereof for the periods covered thereby. As of the Closing Date, except as set forth on Schedule 7.6 to the Disclosure Letter, there is no ongoing audit or examination or, to its knowledge, other investigation by any Governmental Authority of the tax liability of any Credit Party or any Subsidiary thereof. No Governmental Authority has asserted any Lien or other claim against any Credit Party or any Subsidiary thereof with respect to unpaid taxes which has not been discharged or resolved (other than (a) any amount the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided for on the books of the relevant Credit Party or that could not reasonably be expected to have a Material Adverse Effect and (b) Permitted Liens). The charges, accruals and reserves on the books of each Credit Party and each Subsidiary thereof in respect of federal, state, local and other taxes for all Fiscal Years and portions thereof since the organization of any Credit Party or any Subsidiary thereof are in the judgment of the Borrower adequate, and the Borrower does not anticipate any additional taxes or assessments for any of such years that could reasonably be expected to have a Material Adverse Effect.

SECTION 7.7                   Intellectual Property Matters . Each Credit Party and each Subsidiary thereof owns or possesses rights to use all material franchises, licenses, copyrights, copyright applications, patents, patent rights or licenses, patent applications, trademarks, trademark rights, service mark, service mark rights, trade names, trade name rights, copyrights and other rights with respect to the foregoing which are reasonably necessary to conduct its business except where the failure to own or possess such rights could not reasonably be expected to have a Material Adverse Effect. No event has occurred which permits, or after notice or lapse of time or both would permit, the revocation or termination of any such rights, and no Credit Party nor any Subsidiary thereof is liable to any Person for infringement under Applicable Law with respect to any such rights as a result of its business operations, in each case where such revocation, termination or liability could reasonably be expected to have a Material Adverse Effect.

SECTION 7.8                   Environmental Matters .

(a)                 None of the Credit Parties and nor any Subsidiary thereof has released any Hazardous Materials in amounts or concentrations which constitute or constituted a violation of applicable Environmental Laws which could reasonably be expected to have a Material Adverse Effect;

(b)                 To its knowledge, each Credit Party and each Subsidiary thereof and all their operations are in compliance, and have been in compliance, with all applicable Environmental Laws except for such

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noncompliance or violations which could not reasonably be expected to have a Material Adverse Effect, and none of the Credit Parties nor any Subsidiary thereto has actual knowledge of any contamination at, under or about such owned or leased properties which would reasonably be expected to materially interfere with their continued operations;

(c)                 No Credit Party nor any Subsidiary thereof has received any written notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters, Hazardous Materials, or compliance with Environmental Laws that, if adversely determined, could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, nor does any Credit Party or any Subsidiary thereof have actual knowledge that any such written notice will be received or is being threatened;

(d)                 To its knowledge, none of the Credit Parties nor any Subsidiary has transported or disposed of any Hazardous Materials to or from the properties owned, leased or operated by any Credit Party or any Subsidiary thereof in violation of, or in a manner or to a location which could reasonably be expected to give rise to liability under, Environmental Laws which could reasonably be expected to have a Material Adverse Effect, nor have any Hazardous Materials been generated, treated, stored or disposed of at, on or under any of such properties in violation of, or in a manner that could give rise to liability under, any applicable Environmental Laws which could reasonably be expected to have a Material Adverse Effect; and

(e)                 No judicial proceedings or governmental or administrative action is pending, or, to the knowledge of the Borrower, threatened, under any Environmental Law to which any Credit Party or any Subsidiary thereof is or will be named as a potentially responsible party, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, outstanding under any applicable Environmental Law with respect to any Credit Party, any Subsidiary thereof, that could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

SECTION 7.9                   Employee Benefit Matters .

(a)                 [reserved];

(b)                 Each Credit Party and each ERISA Affiliate is in compliance with all applicable provisions of ERISA, the Code and the regulations and published interpretations thereunder with respect to all Employee Benefit Plans except for any required amendments for which the remedial amendment period as defined in Section 401(b) of the Code has not yet expired and except where a failure to so comply could not reasonably be expected to have a Material Adverse Effect. Each Employee Benefit Plan that is intended to be qualified under Section 401(a) of the Code has been determined by the IRS to be so qualified, and each trust related to such plan has been determined to be exempt under Section 501(a) of the Code except for such plans that have not yet received determination letters but for which the remedial amendment period for submitting a determination letter has not yet expired. No liability has been incurred by any Credit Party or any ERISA Affiliate which remains unsatisfied for any taxes or penalties assessed with respect to any Employee Benefit Plan or any Multiemployer Plan except for a liability that could not reasonably be expected to have a Material Adverse Effect;

(c)                 As of the Closing Date, no Pension Plan has been terminated, nor has any Pension Plan become subject to funding based benefit restrictions under Section 436 of the Code, nor has any funding waiver from the IRS been received or requested with respect to any Pension Plan, nor has any Credit Party or any ERISA Affiliate failed to make any contributions or to pay any amounts due and owing as required by Sections 412 or 430 of the Code, Section 302 of ERISA or the terms of any Pension Plan on or prior to the due dates of such contributions under Sections 412 or 430 of the Code or Section 302 of

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ERISA, nor has there been any event requiring any disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any Pension Plan;

(d)                 Except where the failure of any of the following representations to be correct could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, no Credit Party nor any ERISA Affiliate has: (i) engaged in a nonexempt prohibited transaction described in Section 406 of the ERISA or Section 4975 of the Code, (ii) incurred any liability to the PBGC which remains outstanding other than the payment of premiums and there are no premium payments which are due and unpaid, (iii) failed to make a required contribution or payment to a Multiemployer Plan, or (iv) failed to make a required installment or other required payment under Sections 412 or 430 of the Code;

(e)                 No Termination Event has occurred or is reasonably expected to occur;

(f)                  Except where the failure of any of the following representations to be correct could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, no proceeding, claim (other than a benefits claim in the ordinary course of business), lawsuit and/or investigation is existing or, to its knowledge, threatened concerning or involving (i) any employee welfare benefit plan (as defined in Section 3(1) of ERISA) currently maintained or contributed to by any Credit Party or any ERISA Affiliate, (ii) any Pension Plan or (iii) any Multiemployer Plan.

SECTION 7.10               Margin Stock . No Credit Party nor any Subsidiary thereof is engaged principally or as one of its activities in the business of extending credit for the purpose of “purchasing” or “carrying” any “margin stock” (as each such term is defined or used, directly or indirectly, in Regulation U of the Board of Governors of the Federal Reserve System). No part of the proceeds of any of the Loans or Letters of Credit will be used for purchasing or carrying margin stock or for any purpose which violates, or which would be inconsistent with, the provisions of Regulation T, U or X of such Board of Governors. Following the application of the proceeds of each Extension of Credit, not more than twenty-five percent (25%) of the value of the assets (either of the Borrower only or of the Borrower and its Subsidiaries on a Consolidated basis) subject to the provisions of Section 9.2 or Section 9.5 or subject to any restriction contained in any agreement or instrument between the Borrower and any Lender or any Affiliate of any Lender relating to Indebtedness in excess of the Threshold Amount will be “margin stock”.

SECTION 7.11               Government Regulation . No Credit Party nor any Subsidiary thereof is required to register as an “investment company” within the meaning of the Investment Company Act of 1940, and no Credit Party nor any Subsidiary thereof is, or after giving effect to any Extension of Credit will be, subject to regulation under the Interstate Commerce Act, or any other Applicable Law which limits its ability to incur or consummate the transactions contemplated hereby.

SECTION 7.12               Material Contracts . The Borrower’s filings with the SEC set forth a complete and accurate list of all Material Contracts of each Credit Party and each Subsidiary thereof in effect as of the Closing Date. Other than as set forth in Schedule 7.12 to the Disclosure Letter, as of the Closing Date, each such Material Contract is, and after giving effect to the consummation of the transactions contemplated by the Loan Documents will be, in full force and effect in accordance with the terms thereof. As of the Closing Date, no Credit Party nor any Subsidiary thereof (nor, to its knowledge, any other party thereto) is in breach of or in default under any Material Contract in any material respect.

SECTION 7.13               Employee Relations . As of the Closing Date, no Credit Party or any Subsidiary thereof is party to any collective bargaining agreement, nor has any labor union been recognized as the representative of its employees except as set forth on Schedule 7.13 to the Disclosure

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Letter. The Borrower knows of no pending or threatened in writing strikes, work stoppage or other collective labor disputes involving its employees or those of its Subsidiaries that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

SECTION 7.14               Burdensome Provisions . The Credit Parties and their respective Subsidiaries do not presently anticipate that future expenditures needed to meet the provisions of any statutes, orders, rules or regulations of a Governmental Authority will be so burdensome as to have a Material Adverse Effect. No Subsidiary is party to any agreement or instrument or otherwise subject to any restriction or encumbrance that restricts or limits its ability to make dividend payments or other distributions in respect of its Equity Interests to the Borrower or any Subsidiary or to transfer any of its assets or properties to the Borrower or any other Subsidiary in each case other than existing under or by reason of the Loan Documents or Applicable Law or as permitted by Section 9.10 .

SECTION 7.15               Financial Statements . The audited consolidated financial statements of the Borrower and its Subsidiaries for the fiscal year ended July 31, 2014 delivered to the Administrative Agent and the Lenders prior to the Closing Date fairly present in all material respects on a Consolidated basis the assets, liabilities and financial position of the Borrower and its Subsidiaries as at such dates, and the results of the operations and changes of financial position for the periods then ended. All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP. Such financial statements show all material indebtedness and other material liabilities, direct or contingent, of the Borrower and its Subsidiaries as of the date thereof, including material liabilities for taxes, material commitments, and Indebtedness, in each case, to the extent required to be disclosed in financial statements prepared in accordance with GAAP. The pro forma financial statements and projections delivered by the Borrower to the Administrative Agent and the Lenders prior to the Closing Date were prepared in good faith on the basis of the assumptions stated therein, which assumptions are believed to be reasonable in light of then existing conditions except that such financial projections and statements shall be subject to normal year end closing and audit adjustments (it being recognized by the Lenders that projections are not to be viewed as facts and that the actual results during the period or periods covered by such projections may vary from such projections).

SECTION 7.16               No Material Adverse Change . Since July 31, 2014, there has been no material adverse change in the properties, business, operations, or condition (financial or otherwise) of the Borrower and its Subsidiaries, taken as a whole, and no event has occurred or condition arisen, either individually or in the aggregate, that could reasonably be expected to have a Material Adverse Effect.

SECTION 7.17               Solvency . The Borrower and its Subsidiaries, on a Consolidated basis, are Solvent.

SECTION 7.18               Title to Properties . Each Credit Party and each Subsidiary thereof has such title to the real property owned or leased by it as is necessary or desirable to the conduct of its business and valid and legal title to all of its personal property and assets, except those which have been disposed of by the Credit Parties and their Subsidiaries subsequent to such date which dispositions have been in the ordinary course of business or as otherwise expressly permitted hereunder or where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

SECTION 7.19               Litigation . There are no actions, suits or proceedings pending nor, to its knowledge, threatened in writing against or in any other way relating adversely to or affecting any Credit Party or any Subsidiary thereof or any of their respective properties in any court or before any arbitrator of any kind or before or by any Governmental Authority that could reasonably be expected to have a Material Adverse Effect.

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SECTION 7.20               Anti-Terrorism; Anti-Money Laundering . No Credit Party nor any of its Subsidiaries or, to their knowledge, any of their Related Parties (i) is an “enemy” or an “ally of the enemy” within the meaning of Section 2 of the Trading with the Enemy Act of the United States (50 U.S.C. App. §§ 1 et seq.), (ii) is in violation of (A) the Trading with the Enemy Act, (B) any of the foreign assets control regulations of the United States Treasury Department (31 CFR, Subtitle B, Chapter V) or any enabling legislation or executive order relating thereto or (C) the PATRIOT Act (collectively, the “ Anti-Terrorism Laws ”) or (iii) is a Sanctioned Person. No part of the proceeds of any Extension of Credit hereunder will be unlawfully used directly or indirectly to fund any operations in, finance any investments or activities in or make any payments to, a Sanctioned Person or a Sanctioned Country, or in any other manner that will result in any violation by any Person (including any Lender, the Arranger, the Administrative Agent, the Collateral Agent, the Issuing Lender or the Swingline Lender) of any Anti-Terrorism Laws.

SECTION 7.21               Absence of Defaults . No event has occurred or is continuing (a) which constitutes a Default or an Event of Default, or (b) which constitutes, or which with the passage of time or giving of notice or both would constitute, a default or event of default by any Credit Party or any Subsidiary thereof under (i) any Material Contract or (ii) any judgment, decree or order to which any Credit Party or any Subsidiary thereof is a party or by which any Credit Party or any Subsidiary thereof or any of their respective properties may be bound or which would require any Credit Party or any Subsidiary thereof to make any payment thereunder prior to the scheduled maturity date therefor that, in any case under this clause (b), could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

SECTION 7.22               Senior Indebtedness Status . The Obligations of each Credit Party under this Agreement and each of the other Loan Documents rank and shall continue to rank at least senior in priority of payment to all Subordinated Indebtedness and effectively senior to the extent of the value of the Collateral to all unsubordinated unsecured Indebtedness of each such Person and, to the extent applicable, is designated as “Senior Indebtedness” under all instruments and documents, now or in the future, relating to all Subordinated Indebtedness.

SECTION 7.23               Disclosure . The Borrower and/or its Subsidiaries have disclosed to the Administrative Agent and the Lenders all agreements, instruments and corporate or other restrictions to which any Credit Party and any Subsidiary thereof are subject, and all other matters known to them, that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect. No financial statement, material report, material certificate or other material information furnished in writing by or on behalf of any Credit Party or any Subsidiary thereof to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished), taken together as a whole and together with the Borrower’s filings with the SEC, contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, pro forma financial information, estimated financial information and other projected or estimated information, such information was prepared in good faith based upon assumptions believed to be reasonable at the time (it being recognized by the Lenders that projections are not to be viewed as facts and that the actual results during the period or periods covered by such projections may vary from such projections); provided further that with respect to information relating to the Borrower’s industry generally and trade data which relates to a Person that is not the Borrower or a Subsidiary thereof, the Borrower represents and warrants only that such information is believed by it in good faith to be accurate in all material respects.

SECTION 7.24               Compliance with FCPA .

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Each of the Credit Parties and their Subsidiaries is in compliance in all material respects with the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq. , and any foreign counterpart thereto. None of the Credit Parties or their Subsidiaries has made a payment, offering, or promise to pay, or authorized the payment of, money or anything of value (a) in order to assist in obtaining or retaining business for or with, or directing business to, any foreign official, foreign political party, party official or candidate for foreign political office, (b) to a foreign official, foreign political party or party official or any candidate for foreign political office, and (c) with the intent to induce the recipient to misuse his or her official position to direct business wrongfully to such Credit Party or its Subsidiary or to any other Person, in violation of the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-1, et seq.

 

ARTICLE VIII

AFFIRMATIVE COVENANTS

Until all of the Obligations (other than inchoate indemnification obligations and any other obligations which pursuant to the terms of any Loan Document specifically survive repayment of the Loans for which no claim has been made) have been paid and satisfied in full in cash, all Letters of Credit have been terminated or expired (or been Cash Collateralized or other arrangements with respect thereto have been made that are satisfactory to the Issuing Bank) and the Commitments terminated, each Credit Party will, and will cause each of its Subsidiaries to:

SECTION 8.1                   Financial Statements and Budgets . Deliver to the Administrative Agent, in form and detail reasonably satisfactory to the Administrative Agent (which shall promptly make such information available to the Lenders in accordance with its customary practice):

(a)                 Annual Financial Statements . As soon as practicable and in any event within ninety (90) days (or, if earlier, on the date of any required public filing thereof (after giving effect to any extensions for filing under Rule 12b-25 promulgated under the Exchange Act)) after the end of each Fiscal Year (commencing with the Fiscal Year ended July 31, 2015), an audited Consolidated balance sheet of the Borrower and its Subsidiaries as of the close of such Fiscal Year and audited Consolidated statements of income, retained earnings and cash flows including the notes thereto, all in reasonable detail setting forth in comparative form the corresponding figures as of the end of and for the preceding Fiscal Year and prepared in accordance with GAAP and, if applicable, containing disclosure of the effect on the financial position or results of operations of any change in the application of accounting principles and practices during the year. Such annual financial statements shall be audited by an independent certified public accounting firm of recognized national standing, and accompanied by a report and opinion thereon by such certified public accountants prepared in accordance with generally accepted auditing standards that is not subject to any “going concern” or similar qualification or exception or any qualification as to the scope of such audit or with respect to accounting principles followed by the Borrower or any of its Subsidiaries not in accordance with GAAP.

(b)                 Quarterly Financial Statements . As soon as practicable and in any event within forty-five (45) days (or, if earlier, on the date of any required public filing thereof (after giving effect to any extensions for filing under Rule 12b-25 promulgated under the Exchange Act)) after the end of the first three fiscal quarters of each Fiscal Year (commencing with the fiscal quarter ended January 31, 2015), an unaudited Consolidated balance sheet of the Borrower and its Subsidiaries as of the close of such fiscal quarter and unaudited Consolidated statements of income and cash flows, including the notes thereto, all in reasonable detail setting forth in comparative form the corresponding figures as of the end of and for the corresponding period in the preceding Fiscal Year and prepared by the Borrower in accordance with GAAP and, if applicable, containing disclosure of the effect on the financial position or results of operations of any change in the application of accounting principles and practices during the period, and

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certified by the chief financial officer of the Borrower to present fairly in all material respects the financial condition of the Borrower and its Subsidiaries on a Consolidated basis as of their respective dates and the results of operations of the Borrower and its Subsidiaries for the respective periods then ended, subject to normal year-end adjustments and the absence of footnotes.

(c)                 Annual Projections . As soon as practicable and in any event within one hundred twenty (120) days after the end of each Fiscal Year, a projected income statement, balance sheet and statement of cash flows of the Borrower and its Subsidiaries, on a consolidated basis, for the upcoming Fiscal Year, accompanied by a certificate from a Responsible Officer of the Borrower to the effect that such projected income statement, balance sheet and statement of cash flows contain good faith projections (utilizing assumptions believed to be reasonable at the time of delivery of such projections) of the consolidated financial condition and operations of the Borrower and its Subsidiaries for such period.

SECTION 8.2                   Certificates; Other Reports . Deliver to the Administrative Agent (which shall promptly make such information available to the Lenders in accordance with its customary practice):

(a)                 at each time financial statements are delivered pursuant to Sections 8.1(a) or (b) , (i) a duly completed Officer’s Compliance Certificate signed by the chief executive officer, chief financial officer, vice president of finance, treasurer or controller of the Borrower, (ii) a report containing management’s discussion and analysis of such financial statements and (iii) a calculation of Excess Cash Flow; provided , however, such calculation of Excess Cash Flow shall only be required annually (with financial statements delivered pursuant to Section 8.1(a) ) unless the Total Net Leverage Ratio as of the most recent fiscal quarter end is greater than or equal to 3.00 to 1.00;

(b)                 promptly upon receipt thereof, copies of all reports, if any, submitted to the Borrower or its board of directors by its independent public accountants in connection with their auditing function, including, without limitation, any management report and any management responses thereto;

(c)                 promptly after the furnishing thereof, copies of any statement or report with respect to any event of default furnished to any holder of Indebtedness of any Credit Party or any Subsidiary thereof in excess of the Threshold Amount pursuant to the terms of any indenture, loan or credit or similar agreement;

(d)                 promptly after the institution or filing thereof, notice of any action or proceeding against any Credit Party or any Subsidiary thereof with respect to any Environmental Law that could reasonably be expected to have a Material Adverse Effect;

(e)                 promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the Borrower generally in their capacity as such, and copies of all annual, regular, periodic and special reports and registration statements which the Borrower may file or be required to file with the SEC under Section 13 or 15(d) of the Exchange Act, and in any case not otherwise required to be delivered to the Administrative Agent pursuant hereto;

(f)                  promptly, and in any event within five (5) Business Days after receipt thereof by any Credit Party or any Subsidiary thereof, copies of each material notice or other material correspondence received from the SEC (or comparable agency in any applicable non-U.S. jurisdiction) concerning any investigation by such agency regarding financial or other operational results of any Credit Party or any Subsidiary thereof;

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(g)                 promptly upon the request thereof, such other information and documentation required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations (including, without limitation, the PATRIOT Act), as from time to time reasonably requested by the Administrative Agent or any Lender; and

(h)                 such other information regarding the operations, business affairs and financial condition of any Credit Party or any Subsidiary thereof as the Administrative Agent or any Lender may reasonably request.

Documents required to be delivered pursuant to Section 8.1(a) or (b) or Section 8.2(e) or any management report required to be delivered pursuant to Section 8.2(a) (to the extent any such documents or reports are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Borrower posts such documents, or provides a link thereto on the Borrower’s website on the Internet at the website address listed in Section 12.1 ; or (ii) on which such documents are posted on the Borrower’s behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that the Borrower shall notify the Administrative Agent (by facsimile or electronic mail) of the posting of any such documents. Notwithstanding anything contained herein, in every instance the Borrower shall be required to provide (by facsimile or electronic mail) copies of the Officer’s Compliance Certificates required by Section 8.2 to the Administrative Agent. Except for such Officer’s Compliance Certificates, the Administrative Agent shall have no obligation to request the delivery or to maintain copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Borrower with any such request for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

SECTION 8.3                   Notice of Litigation and Other Matters . Promptly (but in no event later than ten (10) Business Days after any Responsible Officer of any Credit Party obtains knowledge thereof) notify the Administrative Agent in writing of (which shall promptly make such information available to the Lenders in accordance with its customary practice):

(a)                 the occurrence of any Default or Event of Default;

(b)                 the commencement of all proceedings and investigations by or before any Governmental Authority and all actions and proceedings in any court or before any arbitrator against or involving any Credit Party or any Subsidiary thereof or any of their respective properties, assets or businesses in each case that if adversely determined could reasonably be expected to result in a Material Adverse Effect;

(c)                 any notice of any violation received by any Credit Party or any Subsidiary thereof from any Governmental Authority including, without limitation, any notice of violation of Environmental Laws which in any such case could reasonably be expected to have a Material Adverse Effect;

(d)                 any labor controversy that has resulted in, or threatens to result in, a strike or other work action against any Credit Party or any Subsidiary thereof that could reasonably be expected to have a Material Adverse Effect;

(e)                 any attachment, judgment, lien, levy or order exceeding the Threshold Amount assessed against any Credit Party or any Subsidiary thereof;

(f)                  any event which constitutes or which with the passage of time or giving of notice or both would constitute a default or event of default under any Material Contract to which the Borrower or any

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of its Subsidiaries is a party or by which the Borrower or any Subsidiary thereof or any of their respective properties may be bound which could reasonably be expected to have a Material Adverse Effect;

(g)                 (i) any unfavorable determination letter from the IRS regarding the qualification of an Employee Benefit Plan under Section 401(a) of the Code (along with a copy thereof), (ii) all notices received by any Credit Party or any ERISA Affiliate of the PBGC’s intent to terminate any Pension Plan or to have a trustee appointed to administer any Pension Plan, (iii) all notices received by any Credit Party or any ERISA Affiliate from a Multiemployer Plan sponsor concerning the imposition or amount of withdrawal liability pursuant to Section 4202 of ERISA and (iv) the Borrower obtaining knowledge or reason to know that any Credit Party or any ERISA Affiliate has filed or intends to file a notice of intent to terminate any Pension Plan under a distress termination within the meaning of Section 4041(c) of ERISA;

(h)                 promptly, any other development or event which could reasonably be expected to have a Material Adverse Effect; and

(i)                   copies of all material notices relating to the Private Placement Note Purchase Agreement, the Additional Pari Passu Agreements or the Senior Notes received from or sent to the Noteholders.

Each notice pursuant to Section 8.3 (other than Section 8.3(i) ) shall be accompanied by a statement of a Responsible Officer of the Borrower setting forth details of the occurrence referred to therein and stating what action the Borrower has taken and proposes to take with respect thereto. Each notice pursuant to Section 8.3(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.

SECTION 8.4                   Preservation of Corporate Existence and Related Matters . Except as permitted by Section 9.4 , preserve and maintain its separate corporate existence and all rights, franchises, licenses and privileges necessary to the conduct of its business, and if applicable qualify and remain qualified as a foreign corporation or other entity and authorized to do business in each jurisdiction in which the failure to so maintain or qualify could reasonably be expected to have a Material Adverse Effect.

SECTION 8.5                   Maintenance of Property and Licenses .

(a)                 In addition to the requirements of any of the Security Documents, protect and preserve all Properties necessary in and material to its business, including copyrights, patents, trade names, service marks and trademarks; maintain in good working order and condition, ordinary wear and tear excepted, all buildings, equipment and other tangible real and personal property; and from time to time make or cause to be made all repairs, renewals and replacements thereof and additions to such Property necessary for the conduct of its business, so that the business carried on in connection therewith may be conducted in a commercially reasonable manner, in each case for this clause (a) except as such action or inaction would not reasonably be expected to result in a Material Adverse Effect.

(b)                 Maintain, in full force and effect in all material respects, each and every license, permit, certification, qualification, approval or franchise issued by any Governmental Authority (each a “ License ”) required for each of them to conduct their respective businesses as presently conducted, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

SECTION 8.6                   Insurance . Maintain insurance with financially sound and reputable insurance companies against at least such risks and in at least such amounts as are customarily maintained by similar businesses and as may be required by Applicable Law and as are required by any Security

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Documents. All such insurance shall, (a) name the Collateral Agent as an additional insured party thereunder and (b) in the case of each casualty insurance policy, name the Collateral Agent as lender’s loss payee.

SECTION 8.7                   Accounting Methods and Financial Records . Maintain a system of accounting, and keep proper books, records and accounts (which shall be true and complete in all material respects) as may be necessary to permit the preparation of financial statements in accordance with GAAP and in compliance with the regulations of any Governmental Authority having jurisdiction over it or any of its Properties.

SECTION 8.8                   Payment of Taxes and Other Obligations . Pay and perform (a) all taxes, assessments and other governmental charges that may be levied or assessed upon it or any of its Property and (b) all other Indebtedness, obligations and liabilities in accordance with customary trade practices, except where the failure to pay or perform such items described in clauses (a) or (b) of this Section could not reasonably be expected to have a Material Adverse Effect.

SECTION 8.9                   Compliance with Laws and Approvals . Observe and remain in compliance with all Applicable Laws and maintain in full force and effect all Governmental Approvals, in each case applicable to the conduct of its business except where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

SECTION 8.10               Environmental Laws . In addition to and without limiting the generality of Section 8.9 , except as would not reasonably be expected to result in a Material Adverse Effect, (a) comply with all applicable Environmental Laws and obtain and comply with and maintain any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws, and (b) conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws, and promptly comply with all lawful orders and directives of any Governmental Authority regarding Environmental Laws.

SECTION 8.11               Compliance with ERISA . In addition to and without limiting the generality of Section 8.9 , (a) except where the failure to so comply could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) comply with applicable provisions of ERISA, the Code and the regulations and published interpretations thereunder with respect to all Employee Benefit Plans, (ii) not take any action or fail to take action the result of which could reasonably be expected to result in a liability to the PBGC or to a Multiemployer Plan, (iii) not participate in any prohibited transaction that could result in any civil penalty under ERISA or tax under the Code and (iv) operate each Employee Benefit Plan in such a manner that will not incur any tax liability under Section 4980B of the Code or any liability to any qualified beneficiary as defined in Section 4980B of the Code and (b) furnish to the Administrative Agent upon the Administrative Agent’s request such additional information about any Employee Benefit Plan as may be reasonably requested by the Administrative Agent.

SECTION 8.12               [Reserved] .

SECTION 8.13               Visits and Inspections . Permit representatives of the Administrative Agent, the Collateral Agent or any Lender, from time to time upon prior reasonable notice and at such times during normal business hours, all at the expense of the Borrower, to visit and inspect its properties; inspect, audit and make extracts from its books, records and files, including, but not limited to, management letters prepared by independent accountants; and discuss with its principal officers, and its independent accountants, its business, assets, liabilities, financial condition, results of operations and business; provided that excluding any such visits and inspections during the continuation of an Event of

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Default, the Administrative Agent shall not exercise such rights more often than one (1) time during any calendar year at the Borrower’s expense and no Lender may exercise any such right; provided further that upon the occurrence and during the continuance of an Event of Default, the Administrative Agent or any Lender may do any of the foregoing at the expense of the Borrower at any time without advance notice.

SECTION 8.14               Additional Subsidiaries .

(a)                 Additional Domestic Subsidiaries . Promptly after the creation or acquisition of any Domestic Subsidiary that is not an Excluded Subsidiary or any formerly Excluded Subsidiary ceases to be an Excluded Subsidiary (and, in any event, within forty-five (45) days after such creation, acquisition or change (which change shall be determined and be deemed to have occurred at the time financial statements for the applicable period have been provided by the Borrower pursuant to this Agreement), as such time period may be extended by the Collateral Agent in its sole discretion) cause such Person or any other Person that guarantees the Senior Notes to (i) become a Guarantor by delivering to the Collateral Agent a duly executed supplement to the Guaranty Agreement and Security Agreement or such other document as the Collateral Agent shall deem appropriate for such purpose, (ii) grant a security interest in all Collateral (subject to the exceptions specified in the Security Agreement) owned by such Subsidiary by delivering to the Collateral Agent a duly executed supplement to each applicable Security Document or such other document as the Collateral Agent shall deem appropriate for such purpose and comply with the terms of each applicable Security Document, (iii) deliver to the Collateral Agent such opinions, documents and certificates referred to in Section 6.1 as may be reasonably requested by the Collateral Agent, (iv) to the extent required by the Security Agreement, deliver to the Collateral Agent such original certificated Equity Interests or other certificates and stock or other transfer powers evidencing the Equity Interests of such Person (to the extent certificated), (v) deliver to the Collateral Agent such updated Schedules to the Loan Documents as reasonably requested by the Collateral Agent with respect to such Person, and (vi) deliver to the Collateral Agent such other documents as may be reasonably requested by the Collateral Agent, all in form, content and scope reasonably satisfactory to the Collateral Agent.

(b)                 Additional Foreign Subsidiaries . Notify the Collateral Agent promptly after any Person becomes a First Tier Foreign Subsidiary, and promptly thereafter (and, in any event, within forty five (45) days after such notification, as such time period may be extended by the Collateral Agent in its sole discretion), cause (i) the applicable Credit Party to deliver to the Collateral Agent Security Documents pledging sixty‑five percent (65%) of the total outstanding voting Equity Interests (and one hundred percent (100%) of the non-voting Equity Interests) of any such new First Tier Foreign Subsidiary and a consent thereto executed by such new First Tier Foreign Subsidiary (including, without limitation, if applicable, original certificated Equity Interests (or the equivalent thereof pursuant to the Applicable Laws and practices of any relevant foreign jurisdiction) evidencing the Equity Interests of such new First Tier Foreign Subsidiary, together with an appropriate undated stock or other transfer power for each certificate duly executed in blank by the registered owner thereof), (ii) such Person to deliver to the Collateral Agent such opinions, documents and certificates referred to in Section 6.1 as may be reasonably requested by the Collateral Agent, (iii) such Person to deliver to the Collateral Agent such updated Schedules to the Loan Documents as requested by the Collateral Agent with regard to such Person and (iv) such Person to deliver to the Collateral Agent such other documents as may be reasonably requested by the Collateral Agent, all in form, content and scope reasonably satisfactory to the Collateral Agent. Notwithstanding the foregoing, in no event shall any Credit Party or any Subsidiary thereof be required to deliver any documents governed by, or take any action with respect to any pledge of such new First Tier Foreign Subsidiary under, the laws of any non-U.S. jurisdiction.

(c)                 Merger Subsidiaries . Notwithstanding the foregoing, to the extent any new Subsidiary is created solely for the purpose of consummating a merger transaction pursuant to a Permitted Acquisition, and such new Subsidiary at no time holds any assets or liabilities other than any merger consideration

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contributed to it contemporaneously with the closing of such merger transaction, such new Subsidiary shall not be required to take the actions set forth in Section 8.14(a) or (b) , as applicable, until the consummation of such Permitted Acquisition (at which time, the surviving entity of the respective merger transaction shall be required to so comply with Section 8.14(a) or (b) , as applicable, within forty-five (45) days of the consummation of such Permitted Acquisition, as such time period may be extended by the Collateral Agent in its sole discretion).

(d)                 Exclusions . The provisions of this Section 8.14 shall not apply to assets as to which the Collateral Agent and the Borrower shall reasonably determine that the costs and burdens of obtaining a security interest therein or perfection thereof outweigh the value of the security afforded thereby.

SECTION 8.15               Use of Proceeds .

(a)                 The Borrower shall use the proceeds of the Extensions of Credit (i) to finance Capital Expenditures, (ii) pay fees, commissions and expenses in connection with the Transactions, and (iii) for working capital and general corporate purposes of the Borrower and its Subsidiaries.

(b)                 The Borrower shall use the proceeds of any Incremental Term Loan and any Incremental Revolving Credit Increase as permitted pursuant to Section 5.13 , as applicable.

SECTION 8.16               Further Assurances .

Execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements and other documents), which may be required under any Applicable Law, or which the Administrative Agent, the Collateral Agent or the Required Lenders may reasonably request, to effectuate the transactions contemplated by the Loan Documents or to grant, preserve, protect or perfect the Liens created or intended to be created by the Security Documents or the validity or priority of any such Lien, all at the expense of the Credit Parties.  The Borrower also agrees to provide to the Administrative Agent and the Collateral Agent, from time to time upon the reasonable request by the Administrative Agent or the Collateral Agent, evidence reasonably satisfactory to the Administrative Agent and the Collateral Agent as to the perfection and priority of the Liens created or intended to be created by the Security Documents.

SECTION 8.17                   Post-Closing Matters . Execute and deliver the documents and complete the tasks set forth on Schedule 2, in each case within the time limits specified on such schedule.

ARTICLE IX

NEGATIVE COVENANTS

Until all of the Obligations (other than inchoate indemnification obligations and any other obligations which pursuant to the terms of any Loan Document specifically survive repayment of the Loans for which no claim has been made) have been paid and satisfied in full in cash, all Letters of Credit have been terminated or expired (or been Cash Collateralized or other arrangements with respect thereto have been made that are satisfactory to the Issuing Bank) and the Commitments terminated, each Credit Party will not, and will not permit any of their respective Subsidiaries to:

SECTION 9.1                   Indebtedness . Create, incur, assume or suffer to exist any Indebtedness except:

(a)                 the Obligations;

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(b)                 Indebtedness and obligations owing under Hedge Agreements entered into in order to manage existing or anticipated interest rate, exchange rate, commodity price or other risks and not for speculative purposes;

(c)                 Indebtedness existing on the Closing Date and listed on Schedule 9.1 to the Disclosure Letter, and any refinancings, refundings, renewals or extensions thereof; provided that (i) the principal amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder, (ii) the final maturity date and weighted average life of such refinancing, refunding, renewal or extension shall not be prior to or shorter than that applicable to the Indebtedness prior to such refinancing, refunding, renewal or extension and (iii) any refinancing, refunding, renewal or extension of any Subordinated Indebtedness shall be (A) on subordination terms at least as favorable to the Lenders, (B) no more restrictive on the Borrower and its Subsidiaries than the Subordinated Indebtedness being refinanced, refunded, renewed or extended and (C) in an amount not less than the amount outstanding at the time of such refinancing, refunding, renewal or extension (the foregoing clauses (A) and (B) being determined by the Borrower in its reasonable judgment);

(d)                 Indebtedness of a Person existing at the time such Person became a Subsidiary or assets were acquired from such Person in connection with an Investment permitted pursuant to Section 9.3 , to the extent that (i) such Indebtedness was not incurred in connection with, or in contemplation of, such Person becoming a Subsidiary or the acquisition of such assets, (ii) neither the Borrower nor any Subsidiary thereof (other than such Person or any other Person that such Person merges with or that acquires the assets of such Person) shall have any liability or other obligation with respect to such Indebtedness and (iii) the aggregate outstanding principal amount of such Indebtedness does not exceed $5,000,000 at any time outstanding;

(e)                 Guaranty Obligations with respect to Indebtedness permitted pursuant to subsections (a) through (d), clause (i), clause (j), clause (n) and clause (o) of this Section;

(f)                  unsecured intercompany Indebtedness:

(i)  owed by any Credit Party to another Credit Party;

(ii)  owed by any Credit Party to any Non-Guarantor Subsidiary ( provided that such Indebtedness shall be subordinated to the Obligations in a manner reasonably satisfactory to the Administrative Agent);

(iii)                owed by any Non-Guarantor Subsidiary to any other Non-Guarantor Subsidiary; and

(iv)  owed by any Non-Guarantor Subsidiary to any Credit Party to the extent permitted pursuant to Section 9.3(a)(vi) ;

(g)                 Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or other similar instrument drawn against insufficient funds in the ordinary course of business;

(h)                 Indebtedness under performance bonds, surety bonds, release, appeal and similar bonds, statutory obligations or with respect to workers’ compensation claims, in each case incurred in the ordinary course of business, and reimbursement obligations in respect of any of the foregoing;

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(i)                   Additional Pari Passu Debt, provided that the total aggregate principal amount for all such Additional Pari Passu Debt when combined with the aggregate outstanding amount of any Incremental Loan Commitments shall not (as of any date of incurrence thereof) exceed $250,000,000 or, if greater, an amount equal to the amount of additional Indebtedness that would not cause the Consolidated Total Net Leverage Ratio as of the four (4) consecutive fiscal quarter period most recently ended prior to the incurrence of such additional Indebtedness, calculated on a Pro Forma Basis after giving effect to the incurrence of such additional Indebtedness (assuming any Incremental Revolving Credit Commitment is fully drawn but without netting the cash proceeds of such Indebtedness), to exceed 2.50 to 1.00;

(j)                   Indebtedness incurred under Private Placement Note Purchase Agreement in an aggregate principal amount not to exceed $400,000,000 at any time outstanding;

(k)                 Indebtedness under the Cash Collateralized Letters of Credit in an aggregate amount not to exceed $25,000,000;

(l)                   Indebtedness arising in connection with customary Cash Management Agreements;

(m)               customer deposits and advance payments received in the ordinary course of business from customers for goods or services purchased in the ordinary course of business;

(n)                 Indebtedness (including purchase money Indebtedness and Capital Leases financing the acquisition, improvement, or construction of equipment (and related software), real estate or facilities) of the Credit Parties and their Subsidiaries in an aggregate principal amount not to exceed 10% of Consolidated Total Assets of the Borrower and its Subsidiaries at any time outstanding; provided , however, (i) no Default or Event of Default shall exist or result therefrom and (ii) Indebtedness of Foreign Subsidiaries shall not exceed an aggregate principal amount at any time outstanding equal to 7.5% of Consolidated Total Assets of the Borrower and its Subsidiaries as of the last day of the fiscal quarter most recently ended for which financial statements have been delivered pursuant to Section 8.1 ; and

(o)                 other unsecured Indebtedness of the Credit Parties so long as (i) no Default or Event of Default shall exist or result therefrom and (ii) before and after giving effect thereto on a Pro Forma Basis the Consolidated Total Net Leverage Ratio of the Borrower and its Subsidiaries (without any deductions with respect to the cash proceeds of any such Indebtedness in calculating net Indebtedness) is less than 3.25 to 1.00.

SECTION 9.2                   Liens . Create, incur, assume or suffer to exist, any Lien on or with respect to any of its Property, whether now owned or hereafter acquired, except:

(a)                 Liens created pursuant to the Loan Documents (including, without limitation, Liens in favor of the Swingline Lender and/or the Issuing Lenders, as applicable, on Cash Collateral granted pursuant to the Loan Documents);

(b)                 Liens in existence on the Closing Date and described on Schedule 9.2 to the Disclosure Letter, and the replacement, renewal or extension thereof (including Liens incurred, assumed or suffered to exist in connection with any refinancing, refunding, renewal or extension of Indebtedness pursuant to Section 9.1(c) (solely to the extent that such Liens were in existence on the Closing Date and described on Schedule 9.2 to the Disclosure Letter)); provided that the scope of any such Lien shall not be increased, or otherwise expanded, to cover any additional property or type of asset, as applicable, beyond that in existence on the Closing Date, except for products and proceeds of the foregoing;

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(c)                 Liens for taxes, assessments and other governmental charges or levies (excluding any Lien imposed pursuant to any of the provisions of ERISA or Environmental Laws) (i) not yet due or as to which the period of grace (not to exceed thirty (30) days), if any, related thereto has not expired or (ii) which are being contested in good faith and by appropriate proceedings if adequate reserves are maintained to the extent required by GAAP;

(d)                 Liens of materialmen, mechanics, carriers, warehousemen, processors or landlords for labor, materials, supplies or rentals incurred in the ordinary course of business, which (i) are not overdue for a period of more than thirty (30) days, or if more than thirty (30) days overdue, no action has been taken to enforce such Liens and such Liens are being contested in good faith and by appropriate proceedings if adequate reserves are maintained to the extent required by GAAP and (ii) do not, individually or in the aggregate, materially impair the use thereof in the operation of the business of the Borrower or any of its Subsidiaries;

(e)                 deposits or pledges made in the ordinary course of business in connection with, or to secure payment of, obligations under workers’ compensation, unemployment insurance and other types of social security or similar legislation, or to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety bonds (other than bonds related to judgments or litigation), performance bonds and other obligations of a like nature incurred in the ordinary course of business, in each case, so long as no foreclosure sale or similar proceeding has been commenced with respect to any portion of the Collateral on account thereof;

(f)                  encumbrances in the nature of zoning restrictions, easements and rights or restrictions of record on the use of real property, which in the aggregate are not substantial in amount and which do not, in any case, detract from the value of such property or impair the use thereof in the ordinary conduct of business;

(g)                 Liens arising from the filing of precautionary UCC financing statements relating solely to personal property leased pursuant to operating leases entered into in the ordinary course of business of the Borrower and its Subsidiaries;

(h)                 Liens securing (i) purchase money Indebtedness and Capital Leases permitted under Section 9.1(n); provided that (A) such Liens shall be created substantially simultaneously with the acquisition, repair, improvement or lease, as applicable, of the related Property, (B) such Liens do not at any time encumber any property other than the Property financed by such Indebtedness (together with additions, accessions and improvements thereto and the proceeds and products thereof), (C) the amount of Indebtedness secured thereby is not increased and (D) the principal amount of Indebtedness secured by any such Lien shall at no time exceed one hundred percent (100%) of the original price for the purchase, repair improvement or lease amount (as applicable) of such Property at the time of purchase, repair, improvement or lease (as applicable); and (ii) Liens securing Indebtedness of Foreign Subsidiaries permitted under Section 9.1(n) ;

(i)                   Liens securing judgments for the payment of money not constituting an Event of Default under Section 10.1(l) or securing appeal or other surety bonds relating to such judgments;

(j)                   Liens on Property (i) of any Subsidiary which are in existence at the time that such Subsidiary is acquired pursuant to a Permitted Acquisition and (ii) of the Borrower or any of its Subsidiaries existing at the time such tangible property or tangible assets are purchased or otherwise acquired by the Borrower or such Subsidiary thereof pursuant to a transaction permitted pursuant to this Agreement; provided that, with respect to each of the foregoing clauses (i) and (ii), (A) such Liens are not incurred in connection with, or in anticipation of, such Permitted Acquisition, purchase or other

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acquisition, (B) such Liens are applicable only to specific Property and the proceeds thereof, (C) such Liens are not “blanket” or all asset Liens, (D) such Liens do not attach to any other Property of the Borrower or any of its Subsidiaries and (E) the Indebtedness secured by such Liens is permitted under Section 9.1(d) of this Agreement);

(k)                 Liens arising as a matter of law or created in the ordinary course of business in the nature of (i) normal and customary rights of setoff and bankers’ liens upon deposits of cash in favor of banks or other depository institutions and (ii) Liens securing reasonable and customary fees for services in favor of banks, securities intermediaries or other depository institutions;

(l)                    Liens of (i) a collecting bank arising in the ordinary course of business under Section 4-210 of the Uniform Commercial Code in effect in the relevant jurisdiction and (ii)  any depositary bank in connection with statutory, common law and contractual rights of set-off and recoupment with respect to any deposit account of the Borrower or any Subsidiary thereof;

(m)               (i) contractual or statutory Liens of landlords to the extent relating to the property and assets relating to any lease agreements with such landlord, and (ii) contractual Liens of suppliers (including sellers of goods) or customers granted in the ordinary course of business to the extent limited to the property or assets relating to such contract;

(n)                 any interest or title of a licensor, sublicensor, lessor or sublessor with respect to any assets under any license or lease agreement entered into in the ordinary course of business which do not (i) interfere in any material respect with the business of the Borrower or its Subsidiaries or materially detract from the value of the relevant assets of the Borrower or its Subsidiaries or (ii) secure any Indebtedness;

(o)                 Liens securing Indebtedness permitted under Sections 9.1(i) , (j) and (k) ;

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

(q)                 customary Liens on insurance proceeds securing financed insurance premiums in the ordinary course of business;

(r)                  Liens on any cash earnest money deposit made by the Borrower or any Subsidiary in connection with any letter of intent or acquisition agreement relating to a Permitted Acquisition, Disposition or other transaction that is not prohibited by this Agreement;

(s)                 customary Liens granted in favor of a trustee pursuant to an indenture relating to Indebtedness not prohibited under this Agreement to the extent such Liens (i) only secure customary compensation, indemnification and reimbursement obligations owing to such trustee under such indenture and (ii) are limited to the cash held by such trustee (excluding cash held in trust for the payment of such Indebtedness);

(t)                  deposits as security for contested Taxes or contested import or customs duties;

(u)                 customary Liens granted in the ordinary course of business securing any overdraft and related liabilities arising under Cash Management Agreements;

(v)                 customary rights of first refusal, voting, redemption, transfer or other restrictions with respect to the Equity Interests in any joint venture entities or other Persons that are not Subsidiaries;

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(w)               Liens on cash and Cash Equivalents arising in connection with the defeasance, discharge or redemption of Indebtedness not prohibited by this Agreement;

(x)                 assignments of the right to receive income effected as part of the sale of a Subsidiary or a business unit that is otherwise permitted pursuant to Section 9.5 ; and

(y)                 other Liens securing Indebtedness or other obligations permitted hereunder in an aggregate principal amount at any time outstanding not exceeding $5,000,000.

Notwithstanding anything to the contrary contained in this Section 9.2 , the Borrower shall not permit any of its owned real property assets to be subject to any Lien (other than as permitted pursuant to Section 9.2(h) or Section 9.2(j) ) securing funded Indebtedness.

 

SECTION 9.3                   Investments . Purchase, own, invest in or otherwise acquire (in one transaction or a series of transactions), directly or indirectly, any Equity Interests (including, without limitation, the creation or capitalization of any Subsidiary), evidence of Indebtedness or other obligation or security, substantially all or a portion of the business or assets of any other Person or any other investment or interest whatsoever in any other Person, or make or permit to exist, directly or indirectly, any loans, advances or extensions of credit to, or any investment in cash or by delivery of Property in, any Person (all the foregoing, “ Investments ”) except:

(a)                 (i)  Investments existing on the Closing Date in Subsidiaries existing on the Closing Date;

(ii)  Investments existing on the Closing Date (other than Investments in Subsidiaries existing on the Closing Date) and described on Schedule 9.3 to the Disclosure Letter;

(iii)  Investments made after the Closing Date by any Credit Party in any other Credit Party;

(iv) Investments made after the Closing Date by any Non-Guarantor Subsidiary in any other Non-Guarantor Subsidiary;

(v) Investments made after the Closing Date by any Non-Guarantor Subsidiary in any Credit Party; and

(vi) Investments made after the Closing Date by any Credit Party in any Non-Guarantor Subsidiary in an aggregate amount at any time outstanding not to exceed $10,000,000 ( provided that any Investments in the form of loans or advances made by any Credit Party to any Non-Guarantor Subsidiary pursuant to this clause (vi) shall be evidenced by a demand note in form and substance reasonably satisfactory to the Administrative Agent);

(vii) intercompany charges of expenses in the ordinary course of business;

 

(b)                 Investments in cash and Investments constituting Cash Equivalents at the time acquired;

(c)                 advances to officers, directors and employees of the Borrower and Subsidiaries made in the ordinary course of business and substantially consistent with past practice for travel, entertainment, relocation, commission advances and analogous ordinary business purposes;

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(d)                 deposits made in the ordinary course of business to secure the performance of leases or other obligations as permitted by Section 9.2 ;

(e)                 Hedge Agreements permitted pursuant to Section 9.1 ;

(f)                  purchases of assets in the ordinary course of business;

(g)                 Investments by the Borrower or any Subsidiary thereof in the form of Permitted Acquisitions;

(h)                 Investments in the form of Restricted Payments permitted pursuant to Section 9.6 ;

(i)                   Guarantee obligations permitted pursuant to Section 9.1 and guarantees in respect of obligations that do not constitute Indebtedness;

(j)                   Investments consisting of extensions of credit in the nature of accounts receivable (including intercompany receivables and intercompany charges or expenses) or notes receivable arising from the grant of trade credit in the ordinary course of business, prepayments or other credits to suppliers or vendors made in the ordinary course of business and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;

(k)                 Investments held by any Person that becomes a Subsidiary of the Borrower after the date hereof pursuant to a Permitted Acquisition; provided that such Investments are existing at the time such Person becomes a Subsidiary of the Borrower and were not made in contemplation of such Permitted Acquisition;

(l)                   to the extent permitted by Section 9.5 , Investments consisting of non-cash consideration received for any Disposition permitted by Section 9.5 ;

(m)               Investments that consist of or result from a merger or consolidation permitted by Section 9.4 ;

(n)                 Investments so long as the Consolidated Total Net Leverage Ratio both before and after giving effect to any such Investment on a Pro Forma Basis is less than 3.00 to 1.00; provided , that, (i) both before and after giving effect to any such Investment pursuant to this clause on a Pro Forma Basis (A) Minimum Liquidity shall be not less than $75,000,000 and (B) no Default or Event of Default shall have occurred and be continuing and (ii) this clause (n) shall not be used to consummate Acquisitions; and

(o)                 Investments, so long as the Consolidated Total Net Leverage Ratio both before and after giving effect to any such Investment on a Pro Forma Basis is less than 3.25 to 1.00, in an aggregate amount not to exceed the Available Amount; provided , that, (i) both before and after giving effect to any such Investment pursuant to this clause on a Pro Forma Basis (A) Minimum Liquidity shall be not less than $75,000,000 and (B) no Default or Event of Default shall have occurred and be continuing and (ii) this clause (o) shall not be used to consummate Acquisitions.

 

For purposes of determining the amount of any Investment outstanding for purposes of this Section 9.3 , such amount shall be deemed to be the amount of such Investment when made, purchased or acquired (without adjustment for subsequent increases or decreases in the value of such Investment) less any

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amount realized in respect of such Investment upon the sale, collection or return of capital (not to exceed the original amount invested).

SECTION 9.4                   Fundamental Changes . Merge, consolidate or consummate any similar combination with, or consummate any Asset Disposition of all or substantially all of its assets (whether in a single transaction or a series of transactions) with, any other Person or liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution) except:

(a)                 (i) any Wholly-Owned Subsidiary of the Borrower may be merged, amalgamated or consolidated with or into the Borrower ( provided that the Borrower shall be the continuing or surviving entity) or (ii) any Wholly-Owned Subsidiary of the Borrower may be merged, amalgamated or consolidated with or into any Guarantor ( provided that the Guarantor shall be the continuing or surviving entity or simultaneously with such transaction, the continuing or surviving entity shall become a Guarantor and the Borrower shall comply with Section 8.14 in connection therewith);

(b)                 (i) any Non-Guarantor Subsidiary that is a Foreign Subsidiary may be merged, amalgamated or consolidated with or into, or be liquidated into, any other Non-Guarantor Subsidiary and (ii) any Non-Guarantor Subsidiary that is a Domestic Subsidiary may be merged, amalgamated or consolidated with or into, or be liquidated into, any other Non-Guarantor Subsidiary that is a Domestic Subsidiary;

(c)                 any Subsidiary may dispose of all or substantially all of its assets (upon voluntary liquidation, dissolution, winding up or otherwise) to the Borrower or any Guarantor; provided that, with respect to any such disposition by any Non-Guarantor Subsidiary, the consideration for such disposition shall not exceed the fair value of such assets;

(d)                 (i) any Non-Guarantor Subsidiary that is a Foreign Subsidiary may dispose of all or substantially all of its assets (upon voluntary liquidation, dissolution, winding up or otherwise) to the Borrower or any Subsidiary and (ii) any Non-Guarantor Subsidiary that is a Domestic Subsidiary may dispose of all or substantially all of its assets (upon voluntary liquidation, dissolution, winding up or otherwise) to any other Non-Guarantor Subsidiary that is a Domestic Subsidiary or the Borrower;

(e)                 any Wholly-Owned Subsidiary of the Borrower may merge with or into the Person such Wholly-Owned Subsidiary was formed to acquire in connection with any acquisition permitted hereunder (including, without limitation, any Permitted Acquisition permitted pursuant to Section 9.3(g) ); provided ; that if any Credit Party is a party thereto, such Credit Party (or a Person who becomes a Credit Party) will be the surviving corporation;

(f)                  any Subsidiary that is not a Credit Party may liquidate or dissolve if (A) such liquidation or dissolution is not materially disadvantageous to the Lenders and (B) all assets of such liquidated or dissolved Subsidiary, after payment of all creditors of such Subsidiary, shall be conveyed to the Borrower or a Subsidiary;

(g)                 any Person may merge into the Borrower or any of its Wholly-Owned Subsidiaries in connection with a Permitted Acquisition permitted pursuant to Section 9.3(g) ; provided that (i) in the case of a merger involving the Borrower or a Guarantor, the continuing or surviving Person shall be the Borrower or such Guarantor and (ii) the continuing or surviving Person shall be the Borrower or a Wholly-Owned Subsidiary of the Borrower; and

(h)                 Asset Dispositions permitted pursuant to Section 9.5(d) or Section 9.5(f) .

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SECTION 9.5                   Asset Dispositions . Make any Asset Disposition except:

(a)                 the sale of obsolete, worn-out or surplus assets no longer used or usable in the business of the Borrower or any of its Subsidiaries;

(b)                 non-exclusive licenses and sublicenses of intellectual property rights in the ordinary course of business not interfering, individually or in the aggregate, in any material respect with the conduct of the business of the Borrower and its Subsidiaries;

(c)                 leases, subleases, licenses or sublicenses of real or personal property granted by the Borrower or any of its Subsidiaries to others in the ordinary course of business not detracting from the value of such real or personal property or interfering in any material respect with the business of the Borrower or any of its Subsidiaries;

(d)                 Asset Dispositions in connection with Insurance and Condemnation Events; provided that the requirements of Section 4.4(b) are complied with in connection therewith;

(e)                 Assets Dispositions in connection with transactions permitted by Section 9.4 ; and

(f)                  Asset Dispositions not otherwise permitted pursuant to this Section; provided that (i) at the time of such Asset Disposition, no Default or Event of Default shall exist or would result from such Asset Disposition, (ii) such Asset Disposition is made for fair market value and the consideration received shall be no less than 75% in cash or Cash Equivalents, and (iii) the aggregate fair market value of all property disposed of in reliance on this clause (f) shall not exceed (A) to the extent the Total Net Leverage Ratio both before and after giving effect to such Asset Disposition is less than or equal to 3.00 to 1.00, 3.0% of Consolidated Total Assets of the Borrower and its Subsidiaries (measured as of the end of the most recent fiscal quarter) during any Fiscal Year and (B) to the extent the Total Net Leverage Ratio both before and after giving effect to such Asset Disposition is greater than 3.00 to 1.00, $25,000,000 in any Fiscal Year.

SECTION 9.6                   Restricted Payments . Declare or pay any dividend on, or make any payment or other distribution on account of, or purchase, redeem, retire or otherwise acquire (directly or indirectly), or set apart assets for a sinking or other analogous fund for the purchase, redemption, retirement or other acquisition of, any class of Equity Interests of any Credit Party or any Subsidiary thereof, or make any distribution of cash, property or assets to the holders of shares of any Equity Interests of any Credit Party or any Subsidiary thereof (all of the foregoing, the “ Restricted Payments ”) provided that:

(a)                 the Borrower or any of its Subsidiaries may pay dividends in shares of its own Qualified Equity Interests;

(b)                 any Subsidiary of the Borrower may pay cash dividends to the Borrower or any Guarantor;

(c)                 any Non-Guarantor Subsidiary may make Restricted Payments to the Borrower or any other Subsidiary (and, if applicable, to other holders of its outstanding Equity Interests on a ratable basis);

(d)                 So long as (A) no Default or Event of Default has occurred or would result therefrom and (B) the Borrower is in compliance with each of the financial covenants contained in Section 9.15 both before and after giving effect to thereto on a Pro Forma Basis, repurchases up to $550,000,000 million of common Equity Interests of the Borrower within 12 months following the Closing Date;

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(e)                 the Borrower may declare and make (and each Subsidiary of the Borrower may declare and make to enable the Borrower to do the same) Restricted Payments not otherwise permitted by this Section, (1) so long as the Consolidated Total Net Leverage Ratio both before and after giving effect to any such Restricted Payment on a Pro Forma Basis is less than 3.00 to 1.00, in an unlimited amount and (2) if clause (1) is not available, so long as the Consolidated Total Net Leverage Ratio both before and after giving effect to any such Restricted Payment on a Pro Forma Basis is less than 3.25 to 1.00, in an aggregate amount not to exceed the Available Amount; provided , that, Minimum Liquidity shall be not less than $75,000,000 both before and after giving effect to any such Restricted Payment pursuant to this clause (e) on a Pro Forma Basis;

(f)                  the Borrower and its Subsidiaries may make non-cash Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for management, employees or other eligible service providers of the Borrower and its Subsidiaries or in connection with a Permitted Acquisition involving the issuance of Equity Interests of the Borrower to its employees or other eligible service providers outside of a stock option or benefit plan that are subject to vesting and forfeiture conditions;

(g)                 the Borrower may repurchase or pay cash in lieu of fractional shares of its Equity Interests arising out of stock dividends, splits or combinations, business combinations or conversions of convertible securities, or the exercise of warrants or the net share settlement thereof;

(h)                 the Borrower and its Subsidiaries may pay withholding taxes in connection with the retention of Equity Interests pursuant to equity-based compensation plans;

(i)                   the Borrower or any Subsidiary may receive or accept the return to the Borrower or any Subsidiary of Equity Interests of the Borrower or any Subsidiary constituting a portion of the purchase price consideration in settlement of indemnification claims;

(j)                   the Borrower may distribute rights pursuant to a stockholder rights plan or make redemptions of such rights; provided that (i) such redemptions are in accordance with the terms of such stockholder rights plan and (ii) the aggregate amount of all such redemptions made during the term of this Agreement do not exceed $1,000,000;

(k)                 to the extent constituting Restricted Payments, the Borrower and its Subsidiaries may enter into and consummate transactions expressly permitted by Section 9.4 ; and

(l)                   the Borrower may make payments or distributions to dissenting stockholders as required by applicable Law.

SECTION 9.7                   Transactions with Affiliates . Directly or indirectly enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of Property, the rendering of any service or the payment of any management, advisory or similar fees, with (a) any officer, director, holder of any Equity Interests in, or other Affiliate of, the Borrower or any of its Subsidiaries or (b) any Affiliate of any such officer, director or holder, other than:

(i)                   transactions permitted by Section 9.6 ;

(ii)                 transactions existing on the Closing Date and described on Schedule 9.7 to the Disclosure Letter;

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(iii)                transactions between or among the Borrower and any Subsidiary or between or among Subsidiaries;

(iv)               other transactions in the ordinary course of business on terms as favorable as would be obtained by it on a comparable arm’s-length transaction with an independent, unrelated third party as determined in good faith by the board of directors (or equivalent governing body) of the Borrower;

(v)                 employment and severance arrangements (including equity incentive plans and employee benefit plans and arrangements) and indemnification agreements or arrangements with their respective officers and employees in the ordinary course of business; and

(vi)               payment of customary fees and reasonable out of pocket costs to, and indemnities for the benefit of, directors, officers and employees of the Borrower and its Subsidiaries in the ordinary course of business to the extent attributable to the ownership or operation of the Borrower and its Subsidiaries.

SECTION 9.8                   Accounting Changes; Organizational Documents .

(a)                 Change the Fiscal Year end of the Borrower, or make (without the consent of the Administrative Agent) any material change in its accounting treatment and reporting practices except as required by GAAP.

(b)                 Amend, modify or change its articles of incorporation (or corporate charter or other similar organizational documents) or amend, modify or change its bylaws (or other similar documents) in any manner materially adverse to the rights or interests of the Lenders.

SECTION 9.9                   Payments and Modifications of Subordinated Indebtedness .

(a)                 Amend, modify, waive or supplement any of the terms or provisions of the Private Placement Note Purchase Agreement, and Additional Pari Passu Agreement or Subordinated Indebtedness in any respect which would (i) materially and adversely affect the rights or interests of the Administrative Agent and Lenders hereunder (as determined by the Borrower in good faith using its reasonable judgment) or (ii) cause the representations, warranties, covenants or events of default to be more restrictive than the representations, warranties, covenants or events of default contained herein without first offering the same such representations, warranties, covenants or events of default to the Lenders hereunder.

(b)                 Cancel, forgive, make any voluntary prepayment on, or redeem or acquire for value (including, without limitation, (x) by way of depositing with any trustee with respect thereto money or securities before due for the purpose of paying when due and (y) at the maturity thereof) any Subordinated Indebtedness, except:

(i)                   refinancings, refundings, renewals, extensions or exchange of any Subordinated Indebtedness permitted by Section 9.1(c) , (f) , (n) or (o) , and by any subordination provisions applicable thereto;

(ii)                 payments and prepayments of any Subordinated Indebtedness made solely with the proceeds of Qualified Equity Interests; and

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(iii)                the payment of interest, expenses and indemnities in respect of Subordinated Indebtedness incurred under Section 9.1(c) , (f) , (n) or (o) (other than any such payments prohibited by any subordination provisions applicable thereto).

SECTION 9.10               No Further Negative Pledges; Restrictive Agreements .

(a)                 Enter into or assume any agreement prohibiting or otherwise restricting the creation or assumption of any Lien upon its properties or assets to secure the Obligations, whether now owned or hereafter acquired, or requiring the grant of any security for such obligation if security is given for some other obligation, except (i) pursuant to this Agreement and the other Loan Documents, (ii) pursuant to any document or instrument governing Indebtedness incurred pursuant to Section 9.1(n) ( provided that any such restriction contained therein relates only to the asset or assets financed thereby), (iii) customary restrictions contained in the organizational documents of any Non-Guarantor Subsidiary as of the Closing Date, (iv) customary restrictions in connection with any Permitted Lien or any document or instrument governing any Permitted Lien ( provided that any such restriction contained therein relates only to the asset or assets subject to such Permitted Lien), (v) restrictions existing on the date hereof and set forth on Schedule 9.10 to the Disclosure Letter, (vi) restrictions in agreement in connection with Indebtedness permitted by Section 9.1(c) , (vii) restrictions contained in the Private Placement Note Purchase Agreement and the documents and agreements entered into in connection therewith, (viii) restrictions contained in documents and agreements governing Additional Pari Passu Debt, (ix) customary restrictions contained in contractual obligations incurred in the ordinary course of business and on customary terms which limit Liens on such contractual obligation, (x) customary provisions restricting the subletting or assignment of any lease governing a leasehold interest and other customary provisions in licenses and other contracts restricting the assignment thereof, (xi) customary restrictions and conditions contained in any agreement relating to an Asset Sale permitted by Section 9.5 ; provided that such restrictions and conditions apply only to the asset to be sold, (xii) any prohibition or limitation that exists pursuant to any applicable Requirement of Law, and (xiii) restrictions or prohibitions contained in any agreements binding on any Subsidiary existing prior to the consummation of an acquisition in which such Subsidiary was acquired (and not created in contemplation of such acquisition); provided that such restrictions and prohibitions apply only to such Subsidiary.

(b)                 Create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Credit Party or any Subsidiary thereof to (i) pay dividends or make any other distributions to any Credit Party or any Subsidiary on its Equity Interests or with respect to any other interest or participation in, or measured by, its profits, (ii) pay any Indebtedness or other obligation owed to any Credit Party or (iii) make loans or advances to any Credit Party, except in each case for such encumbrances or restrictions existing under or by reason of (A) this Agreement and the other Loan Documents, (B) Applicable Law, (C) the Private Placement Note Purchase Agreement and the documents and agreements entered into in connection therewith and (D) restrictions contained in documents and agreements governing Additional Pari Passu Debt.

(c)                 Create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Credit Party or any Subsidiary thereof to (i) sell, lease or transfer any of its properties or assets to any Credit Party or (ii) act as a Credit Party pursuant to the Loan Documents or any renewals, refinancings, exchanges, refundings or extension thereof, except in each case for such encumbrances or restrictions existing under or by reason of (A) this Agreement and the other Loan Documents, (B) Applicable Law, (C) any document or instrument governing Indebtedness incurred pursuant to Section 9.1(n) ( provided that any such restriction contained therein relates only to the asset or assets acquired in connection therewith), (D) any Permitted Lien or any document or instrument governing any Permitted Lien ( provided that any such restriction contained therein relates only to the asset or assets subject to such Permitted Lien), (E) obligations that are binding on a Subsidiary at the time

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such Subsidiary first becomes a Subsidiary of the Borrower, so long as such obligations are not entered into in contemplation of such Person becoming a Subsidiary, (F) customary restrictions contained in an agreement related to the sale of Property (to the extent such sale is permitted pursuant to Section 9.5 ) that limit the transfer of such Property pending the consummation of such sale, (G) customary restrictions in leases, subleases, licenses and sublicenses or asset sale agreements otherwise permitted by this Agreement so long as such restrictions relate only to the assets subject thereto, (H) customary provisions restricting assignment of any agreement entered into in the ordinary course of business, (I) the Private Placement Note Purchase Agreement and the documents and agreements entered into in connection therewith, (J) restrictions contained in documents and agreements governing Additional Pari Passu Debt and (K) restrictions contained in documents and agreements governing Indebtedness permitted under Section 9.1(n) .

SECTION 9.11               Nature of Business . Engage in any business other than the business conducted by the Borrower and its Subsidiaries as of the Closing Date and business activities reasonably related or ancillary thereto or that are reasonable extensions thereof.

SECTION 9.12               [ Reserved] .

SECTION 9.13               Sale Leasebacks . Except in connection with the incurrence of Indebtedness permitted by Section 9.1(n), directly or indirectly become or remain liable as lessee or as guarantor or other surety with respect to any lease, whether an operating lease or a Capital Lease, of any Property (whether real, personal or mixed), whether now owned or hereafter acquired, (a) which any Credit Party or any Subsidiary thereof has sold or transferred or is to sell or transfer to a Person which is not another Credit Party or Subsidiary of a Credit Party or (b) which any Credit Party or any Subsidiary of a Credit Party intends to use for substantially the same purpose as any other Property that has been sold or is to be sold or transferred by such Credit Party or such Subsidiary to another Person which is not another Credit Party or Subsidiary of a Credit Party in connection with such lease.

SECTION 9.14               [Reserved] .

SECTION 9.15               Financial Covenants .

(a)                 Consolidated Total Net Leverage Ratio . As of the last day of any fiscal quarter, permit the Consolidated Total Net Leverage Ratio to be greater than 3.50 to 1.00;

(b)                 Consolidated Interest Coverage Ratio . As of the last day of any fiscal quarter, permit the Consolidated Interest Coverage Ratio to be less than 3.00 to 1.00.

SECTION 9.16               [Reserved] .

SECTION 9.17               Disposal of Subsidiary Interests . Permit any Domestic Subsidiary to be a non-Wholly-Owned Subsidiary except as a result of or in connection with a dissolution, merger, amalgamation, consolidation or disposition permitted by Section 9.4 or 9.5 .

ARTICLE X

DEFAULT AND REMEDIES

SECTION 10.1               Events of Default . Each of the following shall constitute an Event of Default:

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(a)                 Default in Payment of Principal of Loans and Reimbursement Obligations . The Borrower shall default in any payment of principal of any Loan or Reimbursement Obligation when and as due (whether at maturity, by reason of acceleration or otherwise).

(b)                 Other Payment Default . The Borrower shall default in the payment when and as due (whether at maturity, by reason of acceleration or otherwise) of interest on any Loan or Reimbursement Obligation or the payment of any other Obligation, and such default shall continue for a period of three (3) Business Days.

(c)                 Misrepresentation . Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of any Credit Party or any Subsidiary thereof in this Agreement, in any other Loan Document, or in any document delivered in connection herewith or therewith that is subject to materiality or Material Adverse Effect qualifications, shall be incorrect or misleading in any respect when made or deemed made or any representation, warranty, certification or statement of fact made or deemed made by or on behalf of any Credit Party or any Subsidiary thereof in this Agreement, any other Loan Document, or in any document delivered in connection herewith or therewith that is not subject to materiality or Material Adverse Effect qualifications, shall be incorrect or misleading in any material respect when made or deemed made.

(d)                 Default in Performance of Certain Covenants . Any Credit Party or any Subsidiary thereof shall default in the performance or observance of any covenant or agreement contained in Sections 8.1 , 8.2 , 8.3(a) , 8.4 (solely with respect to the maintenance of the existence of the Borrower), 8.14 , 8.15 , 8.16 or Article IX .

(e)                 Default in Performance of Other Covenants and Conditions . Any Credit Party or any Subsidiary thereof shall default in the performance or observance of any term, covenant, condition or agreement contained in this Agreement (other than as specifically provided for in this Section) or any other Loan Document and such default shall continue for a period of thirty (30) days after the earlier of (i) the Administrative Agent’s delivery of written notice thereof to the Borrower and (ii) a Responsible Officer of any Credit Party having obtained knowledge thereof.

(f)                  Indebtedness Cross-Default . Any Credit Party or any Subsidiary thereof shall (i) default in the payment of any Indebtedness (other than the Loans or any Reimbursement Obligation) the aggregate principal amount, or with respect to any Hedge Agreement, the Hedge Termination Value, of which is in excess of the Threshold Amount beyond the period of grace if any, provided in the instrument or agreement under which such Indebtedness was created, or (ii) default in the observance or performance of any other agreement or condition relating to any Indebtedness (other than the Loans or any Reimbursement Obligation) the aggregate principal amount, or with respect to any Hedge Agreement, the Hedge Termination Value, of which is in excess of the Threshold Amount or contained in any instrument or agreement evidencing, securing or relating thereto or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, with the giving of notice and/or lapse of time, if required, any such Indebtedness to become due prior to its stated maturity (any applicable grace period having expired); provided that this clause (f) shall not apply to Indebtedness secured by a Permitted Lien that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness in a sale or transfer permitted under this Agreement, so long as such Indebtedness is repaid when required under the documents providing for such Indebtedness.

(g)                 Change in Control . Any Change in Control shall occur.

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(h)                 Voluntary Bankruptcy Proceeding . Any Credit Party or any Subsidiary (other than an Immaterial Subsidiary) thereof shall (i) commence a voluntary case under any Debtor Relief Laws, (ii) file a petition seeking to take advantage of any Debtor Relief Laws, (iii) consent to or fail to contest in a timely and appropriate manner any petition filed against it in an involuntary case under any Debtor Relief Laws, (iv) apply for or consent to, or fail to contest in a timely and appropriate manner, the appointment of, or the taking of possession by, a receiver, custodian, trustee, or liquidator of itself or of a substantial part of its property, domestic or foreign, (v) admit in writing its inability to pay its debts as they become due, (vi) make a general assignment for the benefit of creditors, or (vii) take any corporate action for the purpose of authorizing any of the foregoing.

(i)                   Involuntary Bankruptcy Proceeding . A case or other proceeding shall be commenced against any Credit Party or any Subsidiary (other than an Immaterial Subsidiary) thereof in any court of competent jurisdiction seeking (i) relief under any Debtor Relief Laws, or (ii) the appointment of a trustee, receiver, custodian, liquidator or the like for any Credit Party or any Subsidiary (other than an Immaterial Subsidiary) thereof or for all or any substantial part of their respective assets, domestic or foreign, and such case or proceeding shall continue without dismissal or stay for a period of sixty (60) consecutive days, or an order granting the relief requested in such case or proceeding (including, but not limited to, an order for relief under such federal bankruptcy laws) shall be entered.

(j)                   Failure of Agreements . Any provision of this Agreement or any provision of any other Loan Document shall for any reason cease to be valid and binding on any Credit Party or any Subsidiary thereof party thereto or any such Person shall so state in writing, or any Loan Document shall for any reason cease to create a valid and perfected first priority Lien (subject to Permitted Liens) on, or security interest in, any of the Collateral purported to be covered thereby, in each case other than in accordance with the express terms hereof or thereof.

(k)                 ERISA Events . The occurrence of any of the following events: (i) a Termination Event or (ii) any Credit Party or any ERISA Affiliate as employers under one or more Multiemployer Plans makes a complete or partial withdrawal from any such Multiemployer Plan and the plan sponsor of such Multiemployer Plans notifies such withdrawing employer that such employer has incurred a withdrawal liability requiring payments in an amount exceeding the Threshold Amount.

(l)                   Judgment . A judgment or order for the payment of money which causes the aggregate amount of all such judgments or orders (net of any amounts paid or fully covered by independent third party insurance as to which the relevant insurance company does not dispute coverage) to exceed the Threshold Amount shall be entered against any Credit Party or any Subsidiary thereof by any court and such judgment or order shall continue without having been discharged, vacated or stayed for a period of sixty (60) consecutive days after the entry thereof.

(m)               Note Purchase Agreements and Senior Notes . Any event of default shall occur under the Private Placement Note Purchase Agreement, any Additional Pari Passu Agreement or Senior Notes.

SECTION 10.2               Remedies . Upon the occurrence and during the continuance of an Event of Default, with the consent of the Required Lenders, the Administrative Agent may, or upon the request of the Required Lenders, the Administrative Agent shall, by notice to the Borrower:

(a)                 Acceleration; Termination of Credit Facility . Terminate the Revolving Credit Commitment and declare the principal of and interest on the Loans and the Reimbursement Obligations at the time outstanding, and all other amounts owed to the Lenders and to the Administrative Agent under this Agreement or any of the other Loan Documents (including, without limitation, all L/C Obligations, whether or not the beneficiaries of the then outstanding Letters of Credit shall have presented or shall be

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entitled to present the documents required thereunder) and all other Obligations, to be forthwith due and payable, whereupon the same shall immediately become due and payable without presentment, demand, protest or other notice of any kind, all of which are expressly waived by each Credit Party, anything in this Agreement or the other Loan Documents to the contrary notwithstanding, and terminate the Credit Facility and any right of the Borrower to request borrowings or Letters of Credit thereunder; provided, that upon the occurrence of an Event of Default specified in Section 10.1(h) or (i) , the Credit Facility shall be automatically terminated and all Obligations shall automatically become due and payable without presentment, demand, protest or other notice of any kind, all of which are expressly waived by each Credit Party, anything in this Agreement or in any other Loan Document to the contrary notwithstanding.

(b)                 Letters of Credit . With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to the preceding paragraph, the Borrower shall at such time deposit in a Cash Collateral account opened by the Administrative Agent an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit. Amounts held in such Cash Collateral account shall be applied by the Administrative Agent to the payment of drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay the other Secured Obligations on a pro rata basis. After all such Letters of Credit shall have expired or been fully drawn upon, the Reimbursement Obligation shall have been satisfied and all other Secured Obligations shall have been paid in full, the balance, if any, in such Cash Collateral account shall be returned to the Borrower.

(c)                 General Remedies . Exercise on behalf of the Secured Parties all of its other rights and remedies under this Agreement, the other Loan Documents and Applicable Law, in order to satisfy all of the Secured Obligations.

SECTION 10.3               Rights and Remedies Cumulative; Non-Waiver; etc.

(a)                 The enumeration of the rights and remedies of the Administrative Agent and the Lenders set forth in this Agreement is not intended to be exhaustive and the exercise by the Administrative Agent and the Lenders of any right or remedy shall not preclude the exercise of any other rights or remedies, all of which shall be cumulative, and shall be in addition to any other right or remedy given hereunder or under the other Loan Documents or that may now or hereafter exist at law or in equity or by suit or otherwise. No delay or failure to take action on the part of the Administrative Agent or any Lender in exercising any right, power or privilege shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege or shall be construed to be a waiver of any Event of Default. No course of dealing between the Borrower, the Administrative Agent and the Lenders or their respective agents or employees shall be effective to change, modify or discharge any provision of this Agreement or any of the other Loan Documents or to constitute a waiver of any Event of Default.

(b)                 Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Credit Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 10.2 for the benefit of all the Lenders and the Issuing Lenders; provided that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) any Issuing Lender or the Swingline Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as an Issuing Lender or Swingline Lender, as the case may be) hereunder and under the other Loan Documents, (c) any Lender

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from exercising setoff rights in accordance with Section 12.4 (subject to the terms of Section 5.6 ), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Credit Party under any Debtor Relief Law; and provided , further , that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 10.2 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 5.6 , any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

SECTION 10.4               Crediting of Payments and Proceeds . In the event that the Obligations have been accelerated pursuant to Section 10.2 or the Administrative Agent or any Lender has exercised any remedy set forth in this Agreement or any other Loan Document, all payments received on account of the Secured Obligations and all net proceeds from the enforcement of the Secured Obligations shall be applied by the Administrative Agent as follows:

First , to payment of that portion of the Secured Obligations constituting fees, indemnities, expenses and other amounts, including attorney fees, payable to the Administrative Agent in its capacity as such, the Issuing Lenders in their capacity as such and the Swingline Lender in its capacity as such, ratably among the Administrative Agent, the Issuing Lenders and Swingline Lender in proportion to the respective amounts described in this clause First payable to them;

Second , to payment of that portion of the Secured Obligations constituting fees, indemnities and other amounts (other than principal and interest) payable to the Lenders under the Loan Documents, including attorney fees, ratably among the Lenders in proportion to the respective amounts described in this clause Second payable to them;

Third , to payment of that portion of the Secured Obligations constituting accrued and unpaid interest on the Loans and Reimbursement Obligations, ratably among the Lenders in proportion to the respective amounts described in this clause Third payable to them;

Fourth , to payment of that portion of the Secured Obligations constituting unpaid principal of the Loans, Reimbursement Obligations and payment obligations then owing under Secured Hedge Agreements and Secured Cash Management Agreements, ratably among the Lenders, the Issuing Lenders, the Hedge Banks and the Cash Management Banks in proportion to the respective amounts described in this clause Fourth payable to them;

Fifth , to the Administrative Agent for the account of the Issuing Lenders, to Cash Collateralize any L/C Obligations then outstanding; and

Last , the balance, if any, after all of the Secured Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by Applicable Law.

Excluded Swap Obligations with respect to any Guarantor shall not be paid with amounts received from such Guarantor or such Guarantor’s assets, but appropriate adjustments shall be made with respect to payments from other Credit Parties to preserve the allocation to Obligations otherwise set forth above in this Section 10.4 .

Notwithstanding the foregoing, Secured Obligations arising under Secured Cash Management Agreements and Secured Hedge Agreements shall be excluded from the application described above if the Administrative Agent has not received written notice thereof, together with such supporting

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documentation as the Administrative Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be. Each Cash Management Bank or Hedge Bank not a party to this Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of Article XI for itself and its Affiliates as if a “Lender” party hereto.

SECTION 10.5               Administrative Agent May File Proofs of Claim . In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Credit Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered (but not obligated) by intervention in such proceeding or otherwise:

(a)                 to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the Issuing Lenders and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the Issuing Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders, the Issuing Lenders and the Administrative Agent under Sections 3.3 , 5.3 and 12.3 ) allowed in such judicial proceeding; and

(b)                 to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and each Issuing Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the Issuing Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 3.3 , 5.3 and 12.3 .

SECTION 10.6               Credit Bidding .

(a)                 The Administrative Agent, on behalf of itself and the Lenders, shall, upon the direction of the Required Lenders, have the right to credit bid and purchase (either directly or through one or more acquisition entities) for the benefit of the Administrative Agent and the Lenders all or any portion of Collateral (i) at any sale thereof conducted by the Administrative Agent at the direction of the Required Lenders under the provisions of the UCC, including pursuant to Sections 9-610 or 9-620 of the Uniform Commercial Code, (ii) at any sale thereof conducted under the provisions of the United States Bankruptcy Code, including Section 363 thereof, or a sale under a confirmed plan of reorganization, or (iii) at any other sale or foreclosure conducted by the Administrative Agent at the direction of the Required Lenders (whether by judicial action or otherwise) in accordance with Applicable Law. In connection with any such credit bid, the Obligations shall be credit bid on a ratable basis with Obligations in respect of contingent or unliquidated claims receiving contingent interest in the acquired assets (or Capital Stock of any acquisition entity used in connection with such acquisition) that would vest upon the liquidation of such claims.

(b)                 Each Lender hereby agrees that, except as otherwise provided in any Loan Documents or with the written consent of the Administrative Agent and the Required Lenders, it will not take any enforcement action prior to maturity under any Loan Document, or exercise any right that it might

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otherwise have under Applicable Law to credit bid at foreclosure sales, Uniform Commercial Code sales or other similar dispositions of Collateral.

 

ARTICLE XI

THE ADMINISTRATIVE AGENT AND COLLATERAL AGENT

SECTION 11.1               Appointment and Authority .

(a)                 Each of the Lenders and each Issuing Lender hereby irrevocably appoints Wells Fargo to act on its behalf as the Administrative Agent and Collateral Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent and/or the Collateral Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent and/or the Collateral Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Collateral Agent, the Lenders and the Issuing Lenders, and neither the Borrower nor any Subsidiary thereof shall have rights as a third-party beneficiary of any of such provisions (other than Section 11.6). It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent and/or the Collateral Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any Applicable Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

(b)                 The Administrative Agent shall also act as the “ Collateral Agent ” under the Loan Documents, and each of the Lenders (including in its capacity as a potential Hedge Bank or Cash Management Bank) and the Issuing Lenders hereby irrevocably appoints and authorizes the Administrative Agent to act as the agent of such Lender and such Issuing Lender for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Credit Parties to secure any of the Secured Obligations, together with such powers and discretion as are reasonably incidental thereto (including, without limitation, to enter into additional Loan Documents or supplements to existing Loan Documents on behalf of the Secured Parties). In this connection, the Administrative Agent, as “Collateral Agent” and any co-agents, sub-agents and attorneys-in-fact appointed by the Administrative Agent pursuant to this Article XI for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Security Documents, or for exercising any rights and remedies thereunder at the direction of the Administrative Agent), shall be entitled to the benefits of all provisions of Articles XI and XII (including Section 12.3 , as though such co-agents, sub-agents and attorneys-in-fact were the “collateral agent” under the Loan Documents) as if set forth in full herein with respect thereto.

SECTION 11.2               Rights as a Lender . The Person serving as the Administrative Agent and/or the Collateral Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and/or Collateral Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent and/or Collateral Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent and/or Collateral Agent hereunder and without any duty to account therefor to the Lenders.

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SECTION 11.3               Exculpatory Provisions .

(a)                 The Administrative Agent and/or Collateral Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder and thereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent and/or Collateral Agent:

(i)                   shall not be subject to any fiduciary or other implied duties, regardless of whether a Default or Event of Default has occurred and is continuing;

(ii)                 shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent and/or Collateral Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent and/or Collateral Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent and/or Collateral Agent to liability or that is contrary to any Loan Document or Applicable Law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and

(iii)                shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to the Borrower or any of its Subsidiaries or Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent, the Collateral Agent or any of their respective Affiliates in any capacity.

(b)                 The Administrative Agent and/or Collateral Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent and/or Collateral Agent shall believe in good faith shall be necessary, under the circumstances as provided in Section 12.2 and Section 10.2 ) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final nonappealable judgment. The Administrative Agent and/or Collateral Agent shall be deemed not to have knowledge of any Default or Event of Default unless and until notice describing such Default or Event of Default is given to the Administrative Agent and/or Collateral Agent by the Borrower, a Lender or an Issuing Lender.

(c)                 The Administrative Agent and/or Collateral Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith (including, without limitation, any report provided to it by an Issuing Lender pursuant to Section 3.9 ), (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, (v) the satisfaction of any condition set forth in Article VI or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent and/or Collateral Agent or (vi) the utilization of any Issuing Lender’s L/C Commitment (it being understood and agreed that each Issuing Lender shall monitor compliance with its own L/C Commitment without any further action by the Administrative Agent and/or Collateral Agent).

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SECTION 11.4               Reliance by the Administrative Agent and/or Collateral Agent . The Administrative Agent and/or Collateral Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent and/or Collateral Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance, extension, renewal or increase of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or an Issuing Lender, the Administrative Agent and/or Collateral Agent may presume that such condition is satisfactory to such Lender or such Issuing Lender unless the Administrative Agent and/or Collateral Agent shall have received notice to the contrary from such Lender or such Issuing Lender prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent and/or Collateral Agent may consult with legal counsel (who may be counsel for the Borrower), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

SECTION 11.5               Delegation of Duties . The Administrative Agent and/or Collateral Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent and/or Collateral Agent. The Administrative Agent and/or Collateral Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and/or Collateral Agent and any such sub-agent, and shall apply to their respective activities in connection with the syndication of the Credit Facility as well as activities as Administrative Agent and/or Collateral Agent. The Administrative Agent and/or Collateral Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and nonappealable judgment that the Administrative Agent and/or Collateral Agent acted with gross negligence or willful misconduct in the selection of such sub‑agents.

SECTION 11.6               Resignation of Administrative Agent and/or Collateral Agent .

(a)                 The Administrative Agent and/or Collateral Agent may at any time give notice of its resignation to the Lenders, the Issuing Lenders and the Borrower. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent and/or Collateral Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “ Resignation Effective Date ”), then the retiring Administrative Agent may and/or Collateral Agent (but shall not be obligated to), on behalf of the Lenders and the Issuing Lenders, appoint a successor Administrative Agent and/or Collateral Agent meeting the qualifications set forth above. Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

(b)                 If the Person serving as Administrative Agent and/or Collateral Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof, the Required Lenders may, to the extent permitted by Applicable Law, by notice in writing to the Borrower and such Person, remove such Person as Administrative Agent and/or Collateral Agent and, in consultation with the Borrower, appoint a successor. If no such successor shall have been so appointed by the Required Lenders and shall have

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accepted such appointment within 30 days (or such earlier day as shall be agreed by the Required Lenders) (the “ Removal Effective Date ”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.

(c)                 With effect from the Resignation Effective Date or the Removal Effective Date (as applicable), (1) the retiring or removed Administrative Agent and/or Collateral Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent and/or Collateral Agent on behalf of the Lenders or the Issuing Lenders under any of the Loan Documents, the retiring or removed Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent and/or Collateral Agent is appointed) and (2) except for any indemnity payments owed to the retiring or removed Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent and/or Collateral Agent shall instead be made by or to each Lender and each Issuing Lender directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent and/or Collateral Agent as provided for above. Upon the acceptance of a successor’s appointment as Administrative Agent and/or Collateral Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring or removed Administrative Agent and/or Collateral Agent (other than any rights to indemnity payments owed to the retiring or removed Administrative Agent and/or Collateral Agent), and the retiring or removed Administrative Agent and/or Collateral Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents. The fees payable by the Borrower to a successor Administrative Agent and/or Collateral Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor. After the retiring or removed Administrative Agent’s and/or Collateral Agent ‘s resignation or removal hereunder and under the other Loan Documents, the provisions of this Article and Section 12.3 shall continue in effect for the benefit of such retiring or removed Administrative Agent and/or Collateral Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Administrative Agent and/or Collateral Agent was acting as Administrative Agent and/or Collateral Agent.

(d)                 Any resignation by, or removal of, Wells Fargo as Administrative Agent and/or Collateral Agent pursuant to this Section shall also constitute its resignation as an Issuing Lender and Swingline Lender. Upon the acceptance of a successor’s appointment as Administrative Agent and/or Collateral Agent hereunder, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Issuing Lender, if in its sole discretion it elects to, and Swingline Lender, (b) the retiring Issuing Lender and Swingline Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (c) the successor Issuing Lender, if in its sole discretion it elects to, shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangement satisfactory to the retiring Issuing Lender to effectively assume the obligations of the retiring Issuing Lender with respect to such Letters of Credit.

SECTION 11.7               Non-Reliance on Administrative Agent and Other Lenders . Each Lender and each Issuing Lender acknowledges that it has, independently and without reliance upon the Administrative Agent and/or Collateral Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and each Issuing Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent and/or Collateral Agent or any other Lender or any of their Related Parties and based on such documents and information as it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or

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based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

SECTION 11.8               No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the syndication agents, documentation agents, co-agents, arrangers or bookrunners listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent and/or Collateral Agent, a Lender or an Issuing Lender hereunder.

SECTION 11.9               Collateral and Guaranty Matters .

(a)                 Each of the Lenders (including in its or any of its Affiliate’s capacities as a potential Hedge Bank or Cash Management Bank) irrevocably authorize the Collateral Agent, at its option and in its discretion:

(i)                   to release any Lien on any Collateral granted to or held by the Collateral Agent, for the ratable benefit of the Secured Parties, under any Loan Document (A) upon the termination of the Revolving Credit Commitment and payment in full of all Secured Obligations (other than (1) inchoate indemnification obligations and any other obligations which pursuant to the terms of any Loan Document specifically survive repayment of the Loans for which no claim has been made and (2) obligations and liabilities under Secured Cash Management Agreements or Secured Hedge Agreements as to which arrangements satisfactory to the applicable Cash Management Bank or Hedge Bank shall have been made) and the expiration or termination of all Letters of Credit (other than Letters of Credit as to which other arrangements satisfactory to the Collateral Agent and the applicable Issuing Lender shall have been made), (B) that is sold or otherwise disposed of or to be sold or otherwise disposed of as part of or in connection with any sale or other disposition permitted under the Loan Documents, or (C) if approved, authorized or ratified in writing in accordance with Section 12.2 ;

(ii)                 to subordinate or release any Lien on any Collateral granted to or held by the Collateral Agent under any Loan Document to the holder of any Lien in connection with purchase money Indebtedness or Capital Leases permitted pursuant to Section 9.2(o) ; and

(iii)                to release any Guarantor from its obligations under any Loan Documents if such Person ceases to be a Subsidiary as a result of a transaction permitted under the Loan Documents.

Upon request by the Collateral Agent at any time, the Required Lenders will confirm in writing the Collateral Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any Guarantor from its obligations under the Guaranty Agreement pursuant to this Section 11.9 . In each case as specified in this Section 11.9 , the Collateral Agent will, at the Borrower’s expense, execute and deliver to the applicable Credit Party such documents as such Credit Party may reasonably request to evidence the release of such item of Collateral from the assignment and security interest granted under the Security Documents or to subordinate its interest in such item, or to release such Guarantor from its obligations under the Guaranty Agreement and the Security Agreement, in each case in accordance with the terms of the Loan Documents and this Section 11.9 . In the case of any such sale, transfer or disposal of any property constituting Collateral in a transaction constituting an Asset Disposition permitted pursuant to Section 9.5 , the Liens created by any of the Security Documents on such property shall be automatically released without need for further action by any person.

(b)                 The Collateral Agent shall not be responsible for or have a duty to ascertain or inquire into any representation or warranty regarding the existence, value or collectability of the Collateral, the

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existence, priority or perfection of the Collateral Agent’s Lien thereon, or any certificate prepared by any Credit Party in connection therewith, nor shall the Collateral Agent be responsible or liable to the Lenders for any failure to monitor or maintain any portion of the Collateral.

SECTION 11.10            Secured Hedge Agreements and Secured Cash Management Agreements . No Cash Management Bank or Hedge Bank that obtains the benefits of Section 10.4 or any Collateral by virtue of the provisions hereof or of any Security Document shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this Article XI to the contrary, the Collateral Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Secured Cash Management Agreements and Secured Hedge Agreements unless the Collateral Agent has received written notice of such Secured Cash Management Agreements and Secured Hedge Agreements, together with such supporting documentation as the Collateral Agent may request, from the applicable Cash Management Bank or Hedge Bank, as the case may be.

ARTICLE XII

MISCELLANEOUS

SECTION 12.1               Notices .

(a)                 Notices Generally . Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in paragraph (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by facsimile as follows:

If to the Borrower:

Copart, Inc.

14185 Dallas Parkway

Dallas, TX 75254

Attention of: Paul A. Styer, General Counsel
Telephone No.: (972) 391-5007
Facsimile No.: (972) 386-6736
E-mail: Paul.Styer@Copart.Com

With Copies to:
 
Copart, Inc.
14185 Dallas Parkway
Dallas, TX 75254
Attention of: Zachary Stenzler, Treasurer
Telephone No.: (972) 391-5115
Facsimile No.: (972) 386-6736
E-mail: Zachary.Stenzler@Copart.Com

If to Wells Fargo as
Administrative
Agent and/or Collateral Agent:

Wells Fargo Bank, National Association
MAC D1109-019
1525 West W.T. Harris Blvd.
Charlotte, NC 28262
Attention of: Syndication Agency Services
Telephone No.: (704) 590-2703
Facsimile No.: (704) 715-0092

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With copies to:

Wells Fargo Bank, National Association
4975 Preston Park Blvd, Suite 280

Plano, TX 75093

Attention of: Jason Ford
Telephone No.: 972-599-5331
Facsimile No.: 972-867-5674
E-mail: jason.ford2@wellsfargo.com

 

If to any Lender:

To the address set forth on the Register

Notices sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices sent by facsimile shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next business day for the recipient). Notices delivered through electronic communications to the extent provided in paragraph (b) below, shall be effective as provided in said paragraph (b).

(b)                 Electronic Communications . Notices and other communications to the Lenders and the Issuing Lenders hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or any Issuing Lender pursuant to Article II if such Lender or such Issuing Lender, as applicable, has notified the Administrative Agent that is incapable of receiving notices under such Article by electronic communication. The Administrative Agent or the Borrower may, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications. Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender’s receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii) above, if such notice, email or other communication is not sent during the normal business hours of the recipient, such notice, email or other communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.

(c)                 Administrative Agent’s Office . The Administrative Agent hereby designates its office located at the address set forth above, or any subsequent office which shall have been specified for such purpose by written notice to the Borrower and Lenders, as the Administrative Agent’s Office referred to herein, to which payments due are to be made and at which Loans will be disbursed and Letters of Credit requested.

(d)                 Change of Address, Etc. Any party hereto may change its address or facsimile number for notices and other communications hereunder by notice to the other parties hereto.

(e)                 Platform .

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(i)                   Each Credit Party agrees that the Administrative Agent may, but shall not be obligated to, make the Borrower Materials available to the Issuing Lenders and the other Lenders by posting the Borrower Materials on the Platform.

(ii)                 The Platform is provided “as is” and “as available.” The Agent Parties (as defined below) do not warrant the accuracy or completeness of the Borrower Materials or the adequacy of the Platform, and expressly disclaim liability for errors or omissions in the Borrower Materials. No warranty of any kind, express, implied or statutory, including, without limitation, any warranty of merchantability, fitness for a particular purpose, non-infringement of third-party rights or freedom from viruses or other code defects, is made by any Agent Party in connection with the Borrower Materials or the Platform. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “ Agent Parties ”) have any liability to any Credit Party, any Lender or any other Person or entity for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of any Credit Party’s or the Administrative Agent’s transmission of communications through the Internet (including, without limitation, the Platform), except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided that in no event shall any Agent Party have any liability to any Credit Party, any Lender, the Issuing Lender or any other Person for indirect, special, incidental, consequential or punitive damages, losses or expenses (as opposed to actual damages, losses or expenses).

(f)                  Private Side Designation . Each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender’s compliance procedures and Applicable Law, including United States Federal and state securities Applicable Laws, to make reference to Borrower Materials that are not made available through the “Public Side Information” portion of the Platform and that may contain material non-public information with respect to the Borrower or its securities for purposes of United States Federal or state securities Applicable Laws.

SECTION 12.2               Amendments, Waivers and Consents . Except as set forth below or as specifically provided in any Loan Document, any term, covenant, agreement or condition of this Agreement or any of the other Loan Documents may be amended or waived by the Lenders, and any consent given by the Lenders, if, but only if, such amendment, waiver or consent is in writing signed by the Required Lenders (or by the Administrative Agent with the consent of the Required Lenders) and delivered to the Administrative Agent and, in the case of an amendment, signed by the Borrower; provided , that no amendment, waiver or consent shall:

(a)                 without the prior written consent of the Lenders holding more than 50% of the unfunded Revolving Commitments, amend, modify or waive (i)  Section 6.2 or any other provision of this Agreement if the effect of such amendment, modification or waiver is to require the Revolving Credit Lenders (pursuant to, in the case of any such amendment to a provision hereof other than Section 6.2 , any substantially concurrent request by the Borrower for a borrowing of Revolving Credit Loans) to make Revolving Credit Loans when such Revolving Credit Lenders would not otherwise be required to do so, (ii) the amount of the Swingline Commitment or (iii) the amount of the L/C Sublimit; or

(b)                 increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 10.2 ) or the amount of Loans of any Lender, in any case, without the written consent of such Lender; or

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(c)                 waive, extend or postpone any date fixed by this Agreement or any other Loan Document for any payment or mandatory prepayment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document without the written consent of each Lender directly and adversely affected thereby; or

(d)                 reduce the principal of, or the rate of interest specified herein on, any Loan or Reimbursement Obligation, or (subject to clause (iv) of the proviso set forth in the paragraph below) any fees or other amounts payable hereunder or under any other Loan Document without the written consent of each Lender directly and adversely affected thereby; provided that only the consent of the Required Lenders shall be necessary (i) to waive any obligation of the Borrower to pay interest at the rate set forth in Section 5.1(b) during the continuance of an Event of Default or (ii) to amend any financial covenant hereunder (or any defined term used therein) even if the effect of such amendment would be to reduce the rate of interest on any Loan or L/C Obligation or to reduce any fee payable hereunder; or

(e)                 change Section 5.6 or Section 10.4 in a manner that would alter the pro rata sharing of payments or order of application required thereby without the written consent of each Lender directly and adversely affected thereby; or

(f)                  change Section 4.4(b)(vi) in a manner that would alter the order of application of amounts prepaid pursuant thereto without the written consent of each Lender directly and adversely affected thereby; or

(g)                 except as otherwise permitted by this Section 12.2 change any provision of this Section or reduce the percentages specified in the definitions of “Required Lenders,” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender directly affected thereby; or

(h)                 consent to the assignment or transfer by any Credit Party of such Credit Party’s rights and obligations under any Loan Document to which it is a party (except as permitted pursuant to Section 9.4 ), in each case, without the written consent of each Lender; or

(i)                   release (i) all of the Guarantors or (ii) Guarantors comprising substantially all of the credit support for the Secured Obligations, in any case, from the Guaranty Agreement (other than as authorized in Section 11.9 or as otherwise specifically permitted or contemplated in this Agreement or the Guaranty Agreement), without the written consent of each Lender; or

(j)                   release all or substantially all of the Collateral or release any Security Document (other than as authorized in Section 11.9 or as otherwise specifically permitted or contemplated in this Agreement or the applicable Security Document) without the written consent of each Lender;

provided further , that (i) no amendment, waiver or consent shall, unless in writing and signed by each affected Issuing Lender in addition to the Lenders required above, affect the rights or duties of such Issuing Lender under this Agreement or any Letter of Credit Application relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swingline Lender in addition to the Lenders required above, affect the rights or duties of the Swingline Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; (iv) each Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto, (v) each Letter of Credit Application may be amended, or rights or privileges thereunder

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waived, in a writing executed only by the parties thereto; provided that a copy of such amended Letter of Credit Application shall be promptly delivered to the Administrative Agent upon such amendment or waiver and (vi) the Administrative Agent and the Borrower shall be permitted to amend any provision of the Loan Documents (and such amendment shall become effective without any further action or consent of any other party to any Loan Document) if the Administrative Agent and the Borrower shall have jointly identified an obvious error or any error or omission of a technical or immaterial nature in any such provision. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Revolving Credit Commitment of such Lender may not be increased or extended without the consent of such Lender.

Notwithstanding anything in this Agreement to the contrary, each Lender hereby irrevocably authorizes the Administrative Agent on its behalf, and without further consent, to enter into amendments or modifications to this Agreement (including, without limitation, amendments to this Section 12.2 ) or any of the other Loan Documents or to enter into additional Loan Documents as the Administrative Agent reasonably deems appropriate in order to effectuate the terms of Section 5.13 (including, without limitation, as applicable, (1) to permit the Incremental Term Loans and the Incremental Revolving Credit Increases to share ratably in the benefits of this Agreement and the other Loan Documents and (2) to include the Incremental Term Loan Commitments and the Incremental Revolving Credit Increase, as applicable, or outstanding Incremental Term Loans and outstanding Incremental Revolving Credit Increase, as applicable, in any determination of (i) Required Lenders or (ii) similar required lender terms applicable thereto); provided that no amendment or modification shall result in any increase in the amount of any Lender’s Commitment or any increase in any Lender’s Commitment Percentage, in each case, without the written consent of such affected Lender.

SECTION 12.3               Expenses; Indemnity .

(a)                 Costs and Expenses . The Borrower and any other Credit Party, jointly and severally, shall pay, promptly upon receipt of a written invoice therefor, (i) all reasonable and documented out of pocket expenses incurred by the Administrative Agent, the Collateral Agent and its Affiliates (including the reasonable and documented fees, charges and disbursements of a single counsel for the Administrative Agent and the Collateral Agent), in connection with the syndication of the Credit Facility, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable and documented out of pocket expenses incurred by any Issuing Lender in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all reasonable and documented out of pocket expenses incurred by the Administrative Agent, the Collateral Agent, any Lender or any Issuing Lender (including the fees, charges and disbursements of any counsel for the Administrative Agent, the Collateral Agent any Lender or any Issuing Lender), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out of pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

(b)                 Indemnification by the Borrower . The Borrower shall indemnify the Administrative Agent and the Collateral Agent (and in each case, any sub-agent thereof), each Lender and each Issuing Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “ Indemnitee ”) against, and hold each Indemnitee harmless from, and shall, promptly upon receipt of a written invoice therefor, pay or reimburse any such Indemnitee for, any and all losses, claims (including, without limitation, any Environmental Claims), penalties, damages, liabilities and related expenses (including the reasonable and documented fees, charges and disbursements of one external counsel and

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one external local counsel in each applicable jurisdiction if required and as selected by the Administrative Agent (and to the extent an Indemnitee determines, after consultation with legal counsel, that an actual or potential conflict may require use of separate counsel by such Indemnitee, separate legal counsel for such Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any Person (including the Borrower or any other Credit Party), other than such Indemnitee and its Related Parties, arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby (including, without limitation, the Transactions), (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by any Issuing Lender in accordance with this Agreement to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by any Credit Party or any Subsidiary thereof, or any Environmental Claim related in any way to any Credit Party or any Subsidiary, (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by any Credit Party or any Subsidiary thereof, and regardless of whether any Indemnitee is a party thereto, or (v) any claim (including, without limitation, any Environmental Claims), investigation, litigation or other proceeding (whether or not the Administrative Agent, the Collateral Agent or any Lender is a party thereto) and the prosecution and defense thereof, arising out of or in any way connected with the Loans, this Agreement, any other Loan Document, or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby, including without limitation, reasonable attorneys and consultant’s fees, provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (A) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (B) result from a claim brought by any Credit Party or any Subsidiary thereof against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other Loan Document, if such Credit Party or such Subsidiary has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction. This Section 12.3(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

(c)                 Reimbursement by Lenders . To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under clause (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), any Issuing Lender, the Swingline Lender or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), such Issuing Lender, the Swingline Lender or such Related Party, as the case may be, such Lender’s pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on each Lender’s share of the Total Credit Exposure at such time, or if the Total Credit Exposure has been reduced to zero, then based on such Lender’s share of the Total Credit Exposure immediately prior to such reduction) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender); provided that with respect to such unpaid amounts owed to any Issuing Lender or the Swingline Lender solely in its capacity as such, only the Revolving Credit Lenders shall be required to pay such unpaid amounts, such payment to be made severally among them based on such Revolving Credit Lenders’ Revolving Credit Commitment Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought or, if the Revolving Credit Commitment has been reduced to zero as of such time, determined immediately prior to such reduction); provided , further , that the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent), such Issuing Lender or the Swingline Lender in its capacity as such, or against any

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Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent), such Issuing Lender or the Swingline Lender in connection with such capacity. The obligations of the Lenders under this clause (c) are subject to the provisions of Section 5.7 .

(d)                 Waiver of Consequential Damages, Etc. To the fullest extent permitted by Applicable Law, the Borrower and each other Credit Party shall not assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in clause (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee.

(e)                 Payments . All amounts due under this Section shall be payable promptly after demand and receipt of a written invoice therefor.

(f)                  Survival . Each party’s obligations under this Section shall survive the termination of the Loan Documents and payment of the obligations hereunder.

SECTION 12.4               Right of Setoff . If an Event of Default shall have occurred and be continuing, each Lender, each Issuing Lender, the Swingline Lender and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by Applicable Law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, such Issuing Lender, the Swingline Lender or any such Affiliate to or for the credit or the account of the Borrower or any other Credit Party against any and all of the obligations of the Borrower or such Credit Party now or hereafter existing under this Agreement or any other Loan Document to such Lender, such Issuing Lender or the Swingline Lender or any of their respective Affiliates, irrespective of whether or not such Lender, such Issuing Lender, the Swingline Lender or any such Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrower or such Credit Party may be contingent or unmatured or are owed to a branch or office of such Lender, such Issuing Lender, the Swingline Lender or such Affiliate different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness; provided that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 10.4 and, pending such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the Issuing Lenders, the Swingline Lender and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender, each Issuing Lender, the Swingline Lender and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, such Issuing Lender, the Swingline Lender or their respective Affiliates may have. Each Lender, such Issuing Lender and the Swingline Lender agree to notify the Borrower and the Administrative Agent promptly after any such setoff and application; provided that the failure to give such notice shall not affect the validity of such setoff and application.

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SECTION 12.5               Governing Law; Jurisdiction, Etc.

(a)                 Governing Law . This Agreement and the other Loan Documents and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement or any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the law of the State of New York.

(b)                 Submission to Jurisdiction . The Borrower and each other Credit Party irrevocably and unconditionally agrees that it will not commence any action, litigation or proceeding of any kind or description, whether in law or equity, whether in contract or in tort or otherwise, against the Administrative Agent, the Collateral Agent, any Lender, any Issuing Lender, the Swingline Lender, or any Related Party of the foregoing in any way relating to this Agreement or any other Loan Document or the transactions relating hereto or thereto, in any forum other than the courts of the State of New York sitting in New York County, and of the United States District Court of the Southern District of New York, and any appellate court from any thereof, and each of the parties hereto irrevocably and unconditionally submits to the jurisdiction of such courts and agrees that all claims in respect of any such action, litigation or proceeding may be heard and determined in such New York State court or, to the fullest extent permitted by Applicable Law, in such federal court.  Each of the parties hereto agrees that a final judgment in any such action, litigation or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  Nothing in this Agreement or in any other Loan Document shall affect any right that the Administrative Agent, the Collateral Agent, any Lender, any Issuing Lender or the Swingline Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or any other Credit Party or its properties in the courts of any jurisdiction.

(c)                 Waiver of Venue . The Borrower and each other Credit Party irrevocably and unconditionally waives, to the fullest extent permitted by Applicable Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by Applicable Law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court.

(d)                 Service of Process . Each party hereto irrevocably consents to service of process in the manner provided for notices in Section 12.1 . Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by Applicable Law.

SECTION 12.6               Waiver of Jury Trial .

EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.

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SECTION 12.7               Reversal of Payments . To the extent any Credit Party makes a payment or payments to the Administrative Agent for the ratable benefit of the Lenders or the Administrative Agent receives any payment or proceeds of the Collateral which payments or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any Debtor Relief Law, other Applicable Law or equitable cause, then, to the extent of such payment or proceeds repaid, the Obligations or part thereof intended to be satisfied shall be revived and continued in full force and effect as if such payment or proceeds had not been received by the Administrative Agent.

SECTION 12.8               Injunctive Relief . The Borrower recognizes that, in the event the Borrower fails to perform, observe or discharge any of its obligations or liabilities under this Agreement, any remedy of law may prove to be inadequate relief to the Lenders. Therefore, the Borrower agrees that the Lenders, at the Lenders’ option, shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages.

SECTION 12.9               Successors and Assigns; Participations .

(a)                 Successors and Assigns Generally . The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that, other than in connection with a transaction permitted by Section 9.5, neither the Borrower nor any other Credit Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an assignee in accordance with the provisions of paragraph (b) of this Section, (ii) by way of participation in accordance with the provisions of paragraph (d) of this Section or (iii) by way of pledge or assignment of a security interest subject to the restrictions of paragraph (e) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in paragraph (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)                 Assignments by Lenders . Any Lender may at any time assign to one or more assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Revolving Credit Commitment and the Loans at the time owing to it); provided that, in each case with respect to any Credit Facility, any such assignment shall be subject to the following conditions:

(i)                   Minimum Amounts .

(A)               in the case of an assignment of the entire remaining amount of the assigning Lender’s Commitment and/or the Loans at the time owing to it (in each case with respect to any Credit Facility) or contemporaneous assignments to related Approved Funds that equal at least the amount specified in paragraph (b)(i)(B) of this Section in the aggregate or in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

(B)               in any case not described in paragraph (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment and Assumption with respect to such

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assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date) shall not be less than $5,000,000, in the case of any assignment in respect of the Revolving Credit Facility, or $1,000,000, in the case of any assignment in respect of the Term Loan Facility, unless each of the Administrative Agent and, so long as no Event of Default has occurred and is continuing, the Borrower otherwise consents (each such consent not to be unreasonably withheld or delayed); provided that the Borrower shall be deemed to have given its consent five (5) Business Days after the date written notice thereof has been delivered by the assigning Lender (through the Administrative Agent) unless such consent is expressly refused by the Borrower prior to such fifth (5th) Business Day;

(ii)                 Proportionate Amounts . Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loan or the Commitment assigned, except that this clause (ii) shall not prohibit any Lender from assigning all or a portion of its rights and obligations among separate classes on a non- pro rata basis;

(iii)                Required Consents . No consent shall be required for any assignment except to the extent required by paragraph (b)(i)(B) of this Section and, in addition:

(A)               the consent of the Borrower (such consent not to be unreasonably withheld or delayed) shall be required unless (x) an Event of Default has occurred and is continuing at the time of such assignment or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided , that the Borrower shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within 5 Business Days after having received notice thereof;

(B)               the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for assignments in respect of (i) the Revolving Credit Facility if such assignment is to a Person that is not a Lender with a Revolving Credit Commitment, an Affiliate of such Lender or an Approved Fund with respect to such Lender or (ii) the Term Loans to a Person who is not a Lender, an Affiliate of a Lender or an Approved Fund; and

(C)               the consents of the Issuing Lenders and the Swingline Lender shall be required for any assignment in respect of the Revolving Credit Facility.

(iv)               Assignment and Assumption . The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500 for each assignment; provided that (A) only one such fee will be payable in connection with simultaneous assignments to two or more related Approved Funds by a Lender and (B) the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

(v)                 No Assignment to Certain Persons . No such assignment shall be made to (A) the Borrower or any of its Subsidiaries or Affiliates or (B) any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B).

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(vi)               No Assignment to Natural Persons . No such assignment shall be made to a natural Person.

(vii)              Certain Additional Payments . In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Borrower and the Administrative Agent, the applicable pro rata share of Loans previously requested, but not funded by, the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (A) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, the Issuing Lenders, the Swingline Lender and each other Lender hereunder (and interest accrued thereon), and (B) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and Swingline Loans in accordance with its Revolving Credit Commitment Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under Applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 5.8 , 5.9 , 5.10 , 5.11 and 12.3 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided , that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender’s having been a Defaulting Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this Section (other than a purported assignment to a natural Person or the Borrower or any of the Borrower’s Subsidiaries or Affiliates, which shall be null and void.)

(c)                 Register . The Administrative Agent, acting solely for this purpose as a non-fiduciary agent of the Borrower, shall maintain at one of its offices in Charlotte, North Carolina, a copy of each Assignment and Assumption and each Lender Joinder Agreement delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amounts of (and stated interest on) the Loans owing to, each Lender pursuant to the terms hereof from time to time (the “ Register ”). The entries in the Register shall be conclusive, absent manifest error, and the Borrower, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Borrower and any Lender (but only to the extent of entries in the Register that are applicable to such Lender), at any reasonable time and from time to time upon reasonable prior notice.

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(d)                 Participations . Any Lender may at any time, without the consent of, or notice to, the Borrower or the Administrative Agent, sell participations to any Person (other than a natural Person or the Borrower or any of the Borrower’s Subsidiaries or Affiliates) (each, a “ Participant ”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent, the Issuing Lender, the Swingline Lender and the other Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 12.3(c) with respect to any payments made by such Lender to its Participant(s).

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver or modification described in Section 12.2(b) , (c) , (d) or (e) that directly and adversely affects such Participant. The Borrower agrees that each Participant shall be entitled to the benefits of Sections 5.9 , 5.10 and 5.11 (subject to the requirements and limitations therein, including the requirements under Section 5.11(g) (it being understood that the documentation required under Section 5.11(g) shall be delivered to the participating Lender)) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Section 5.12 as if it were an assignee under paragraph (b) of this Section; and (B) shall not be entitled to receive any greater payment under Sections 5.10 or 5.11 , with respect to any participation, than its participating Lender would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Lender that sells a participation agrees, at the Borrower's request and expense, to use reasonable efforts to cooperate with the Borrower to effectuate the provisions of Section 5.12(b) with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 12.4 as though it were a Lender; provided that such Participant agrees to be subject to Section 5.6 as though it were a Lender.

Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrower, maintain a register on which it enters the name and address of each Participant and the principal amounts of (and stated interest on) each Participant’s interest in the Loans or other obligations under the Loan Documents (the “ Participant Register ”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant’s interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(e)                 Certain Pledges . Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

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SECTION 12.10            Treatment of Certain Information; Confidentiality . Each of the Administrative Agent, the Lenders and the Issuing Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) on a need to know basis to its Affiliates and to its and its Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent required or requested by, or required to be disclosed to, any regulatory or similar authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners), in which case the Administrative Agent and the Lenders agree to the extent not prohibited by applicable law, rule, regulation or order to inform the Borrower promptly of the disclosure thereof, (c) as to the extent required by Applicable Laws or regulations or in any legal, judicial, administrative or other compulsory proceeds, in which case the Administrative Agent and the Lenders agree to the extent not prohibited by applicable law, rule, regulation or order to inform the Borrower promptly of the disclosure thereof, (d) to any other party hereto, (e) in connection with the exercise of any remedies under this Agreement, under any other Loan Document or under any Secured Hedge Agreement or Secured Cash Management Agreement, or any action or proceeding relating to this Agreement, any other Loan Document or any Secured Hedge Agreement or Secured Cash Management Agreement, or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights and obligations under this Agreement, (ii) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to the Borrower and its obligations, this Agreement or payments hereunder, (iii) to an investor or prospective investor in an Approved Fund that also agrees that Information shall be used solely for the purpose of evaluating an investment in such Approved Fund, (iv) to a trustee, collateral manager, servicer, backup servicer, noteholder or secured party in an Approved Fund in connection with the administration, servicing and reporting on the assets serving as collateral for an Approved Fund, or (v) to a nationally recognized rating agency that requires access to information regarding the Borrower and its Subsidiaries, the Loans and the Loan Documents in connection with ratings issued with respect to an Approved Fund, (g) on a confidential basis to (i) any rating agency in connection with rating the Borrower or its Subsidiaries or the Credit Facility or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers with respect to the Credit Facility, (h) with the consent of the Borrower, (i) to Gold Sheets and other similar bank trade publications, such information to consist solely of deal terms and other information customarily found in such publications, (j) to the extent such Information (i) becomes publicly available other than as a result of a breach of this Section or (ii) becomes available to the Administrative Agent, any Lender, any Issuing Lender or any of their respective Affiliates from a third party that is not, to such Person’s knowledge, subject to confidentiality obligations to the Borrower, (k) to governmental regulatory authorities in connection with any regulatory examination of the Administrative Agent or any Lender or in accordance with the Administrative Agent’s or any Lender’s regulatory compliance policy if the Administrative Agent or such Lender deems necessary for the mitigation of claims by those authorities against the Administrative Agent or such Lender or any of its subsidiaries or affiliates, (l) to the extent that such information is independently developed by such Commitment Party, or (m) for purposes of establishing a “due diligence” defense. For purposes of this Section, “ Information ” means all information received from any Credit Party or any Subsidiary thereof relating to any Credit Party or any Subsidiary thereof or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or any Issuing Lender on a nonconfidential basis prior to disclosure by any Credit Party or any Subsidiary thereof; provided that, in the case of information received from a Credit Party or any Subsidiary thereof after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if

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such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

SECTION 12.11            Performance of Duties . Each of the Credit Party’s obligations under this Agreement and each of the other Loan Documents shall be performed by such Credit Party at its sole cost and expense.

SECTION 12.12            All Powers Coupled with Interest . All powers of attorney and other authorizations granted to the Lenders, the Administrative Agent, the Collateral Agent and any Persons designated by the Administrative Agent, the Collateral Agent or any Lender pursuant to any provisions of this Agreement or any of the other Loan Documents shall be deemed coupled with an interest and shall be irrevocable so long as any of the Obligations remain unpaid or unsatisfied, any of the Commitments remain in effect or the Credit Facility has not been terminated.

SECTION 12.13            Survival .

(a)                 All representations and warranties set forth in Article VII and all representations and warranties contained in any certificate, or any of the Loan Documents (including, but not limited to, any such representation or warranty made in or in connection with any amendment thereto) shall constitute representations and warranties made under this Agreement. All representations and warranties made under this Agreement shall be made or deemed to be made at and as of the Closing Date (except those that are expressly made as of a specific date), shall survive the Closing Date and shall not be waived by the execution and delivery of this Agreement, any investigation made by or on behalf of the Lenders or any borrowing hereunder.

(b)                 Notwithstanding any termination of this Agreement, the indemnities to which the Administrative Agent, the Collateral Agent and the Lenders are entitled under the provisions of this Article XII and any other provision of this Agreement and the other Loan Documents shall continue in full force and effect and shall protect the Administrative Agent, the Collateral Agent and the Lenders against events arising after such termination as well as before.

SECTION 12.14            Titles and Captions . Titles and captions of Articles, Sections and subsections in, and the table of contents of, this Agreement are for convenience only, and neither limit nor amplify the provisions of this Agreement.

SECTION 12.15            Severability of Provisions . Any provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating the remainder of such provision or the remaining provisions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction.

SECTION 12.16            Counterparts; Integration; Effectiveness; Electronic Execution .

(a)                 Counterparts; Integration; Effectiveness . This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents, and any separate letter agreements with respect to fees payable to the Administrative Agent, the Issuing Lender, the Swingline Lender and/or the Arranger, constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 6.1 , this Agreement shall become effective when it shall have been executed by the

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Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by facsimile or in electronic (i.e., “pdf” or “tif”) format shall be effective as delivery of a manually executed counterpart of this Agreement.

(b)                 Electronic Execution of Assignments . The words “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption shall be deemed to include electronic signatures or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any Applicable Law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

SECTION 12.17            Term of Agreement . This Agreement shall remain in effect from the Closing Date through and including the date upon which all Obligations (other than inchoate indemnification obligations and any other obligations which pursuant to the terms of any Loan Document specifically survive repayment of the Loans for which no claim has been made) arising hereunder or under any other Loan Document shall have been indefeasibly and irrevocably paid and satisfied in full, all Letters of Credit have been terminated or expired (or been Cash Collateralized) or otherwise satisfied in a manner acceptable to the Issuing Lender) and the Revolving Credit Commitment has been terminated. No termination of this Agreement shall affect the rights and obligations of the parties hereto arising prior to such termination or in respect of any provision of this Agreement which survives such termination.

SECTION 12.18            USA PATRIOT Act . The Administrative Agent and each Lender hereby notifies the Borrower that pursuant to the requirements of the PATRIOT Act, each of them is required to obtain, verify and record information that identifies each Credit Party, which information includes the name and address of each Credit Party and other information that will allow such Lender to identify each Credit Party in accordance with the PATRIOT Act.

SECTION 12.19            Independent Effect of Covenants . The Borrower expressly acknowledges and agrees that each covenant contained in Articles VIII or IX hereof shall be given independent effect. Accordingly, the Borrower shall not engage in any transaction or other act otherwise permitted under any covenant contained in Articles VIII or IX , before or after giving effect to such transaction or act, the Borrower shall or would be in breach of any other covenant contained in Articles VIII or IX .

SECTION 12.20            No Advisory or Fiduciary Responsibility .

(a)              In connection with all aspects of each transaction contemplated hereby, each Credit Party acknowledges and agrees, and acknowledges its Affiliates’ understanding, that (i) the facilities provided for hereunder and any related arranging or other services in connection therewith (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document) are an arm’s-length commercial transaction between the Borrower and its Affiliates, on the one hand, and the Administrative Agent, the Arrangers and the Lenders, on the other hand, and the Borrower is capable of evaluating and understanding and understands and accepts the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents (including any amendment, waiver or other modification hereof or thereof), (ii) in connection with the process leading to such transaction, each of the Administrative Agent, the Arrangers and the Lenders is and has been acting solely as a principal and is not the financial advisor, agent or fiduciary, for the Borrower or any of its Affiliates, stockholders, creditors or employees or any other Person, (iii) none of the Administrative Agent, the Arrangers or the Lenders has assumed or will assume an advisory, agency or fiduciary responsibility in favor of the Borrower with respect to any of the transactions contemplated hereby or the process leading thereto,

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including with respect to any amendment, waiver or other modification hereof or of any other Loan Document (irrespective of whether any Arranger or Lender has advised or is currently advising the Borrower or any of its Affiliates on other matters) and none of the Administrative Agent, the Arrangers or the Lenders has any obligation to the Borrower or any of its Affiliates with respect to the financing transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents, (iv) the Arrangers and the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from, and may conflict with, those of the Borrower and its Affiliates, and none of the Administrative Agent, the Arrangers or the Lenders has any obligation to disclose any of such interests by virtue of any advisory, agency or fiduciary relationship and (v) the Administrative Agent, the Arrangers and the Lenders have not provided and will not provide any legal, accounting, regulatory or tax advice with respect to any of the transactions contemplated hereby (including any amendment, waiver or other modification hereof or of any other Loan Document) and the Credit Parties have consulted their own legal, accounting, regulatory and tax advisors to the extent they have deemed appropriate.

(b)              Each Credit Party acknowledges and agrees that each Lender, the Arrangers and any Affiliate thereof may lend money to, invest in, and generally engage in any kind of business with, any of the Borrower, any Affiliate thereof or any other person or entity that may do business with or own securities of any of the foregoing, all as if such Lender, Arranger or Affiliate thereof were not a Lender or Arranger or an Affiliate thereof (or an agent or any other person with any similar role under the Credit Facilities) and without any duty to account therefor to any other Lender, the Arrangers, the Borrower or any Affiliate of the foregoing.  Each Lender, the Arrangers and any Affiliate thereof may accept fees and other consideration from the Borrower or any Affiliate thereof for services in connection with this Agreement, the Credit Facilities or otherwise without having to account for the same to any other Lender, the Arrangers, the Borrower or any Affiliate of the foregoing.

SECTION 12.21            Intercreditor Agreement . Each of the Lenders hereby acknowledges that it has received and reviewed the Intercreditor Agreement and agrees to be bound by the terms thereof. Each Lender (and each Person that becomes a Lender hereunder pursuant to Section 12.9) hereby (a) acknowledges that Wells Fargo is acting under the Intercreditor Agreement in multiple capacities as the Administrative Agent and the Collateral Agent and (b) waives any conflict of interest, now contemplated or arising hereafter, in connection therewith and agrees not to assert against Wells Fargo any claims, causes of action, damages or liabilities of whatever kind or nature relating to any such conflict of interest. Each Lender (and each Person that becomes a Lender hereunder pursuant to Section 12.9) hereby authorizes and directs Wells Fargo to enter into the Intercreditor Agreement on behalf of such Lender and agrees that Wells Fargo, in its various capacities thereunder, may take such actions on its behalf as is contemplated by the terms of the Intercreditor Agreement.

SECTION 12.22            Inconsistencies with Other Documents . In the event there is a conflict or inconsistency between this Agreement and any other Loan Document, the terms of this Agreement shall control; provided that any provision of the Security Documents which imposes additional burdens on the Borrower or any of its Subsidiaries or further restricts the rights of the Borrower or any of its Subsidiaries or gives the Administrative Agent or Lenders additional rights shall not be deemed to be in conflict or inconsistent with this Agreement and shall be given full force and effect.

[ Signature pages to follow ]

116

 

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

COPART, INC., as Borrower

By:

/s/ Paul A. Styer

Name:

Paul A. Styer

Title:

Senior Vice President, General Counsel and Secretary

 

 

AGENTS AND LENDERS:

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent, Swingline Lender, Issuing Lender and Lender

By:

/s/ Jason Ford

Name:

Jason Ford

Title:

Vice President

 

 

 

BANK OF AMERICA, N.A., as a Lender

By:

/s/ Ronald J. Drobny

Name:

Ronald J. Drobny

Title:

Senior Vice President

 

 

 

 

EXECUTION VERSION



SECURITY AGREEMENT


This SECURITY AGREEMENT (as amended, restated, modified or otherwise supplemented from time to time, this “ Agreement ”), dated as of December 3, 2014, among the Persons listed on the signature pages hereof as “Grantors” and those additional entities that hereafter become parties hereto by executing the form of Joinder attached hereto as Annex 1 (each, a “ Grantor ” and collectively, the “ Grantors ”), and WELLS FARGO BANK, NATIONAL ASSOCIATION , in its capacity as collateral agent pursuant to the Intercreditor Agreement (as defined below) for the Lenders, the Hedge Banks (as defined below), the Cash Management Banks (as defined below), the Noteholders (as defined below) and the Additional Pari Passu Lenders (in such capacity, “ Collateral Agent ”).


W I T N E S S E T H:


WHEREAS , pursuant to that certain Credit Agreement of even date herewith (as amended, restated, supplemented, or otherwise modified from time to time, the “ Credit Agreement ”), by and among COPART, INC. , a Delaware corporation (the “ Borrower ”), the banks and other financial institutions from time to time party thereto (the “ Lenders ”) and WELLS FARGO BANK, NATIONAL ASSOCIATION , as administrative agent (in such capacity, “ Administrative Agent ”), the Lenders have agreed to make certain financial accommodations available to Borrower from time to time pursuant to the terms and conditions thereof;


WHEREAS , pursuant to the Note Purchase Agreement of even date herewith (as amended, restated, supplemented, or otherwise modified from time to time, the “ Note Agreement ”), among the Borrower and the purchasers listed on Schedule B thereto (together with their permitted successors and assigns, the “ Noteholders ”), the Noteholders are purchasing on the date hereof certain senior secured notes of the Borrower (the “ Senior Notes ”); and


WHEREAS , the Administrative Agent, the Noteholders and the Collateral Agent have entered into an Intercreditor and Collateral Agency Agreement dated as of the date hereof (as amended, restated, supplemented, or otherwise modified from time to time, the “ Intercreditor Agreement ”) governing their respective rights as creditors of the Grantors and appointing the Collateral Agent as agent for the Secured Creditors (as defined below) with respect to the collateral securing the Senior Indebtedness (as defined in the Intercreditor Agreement);

WHEREAS , in order to induce (a) the Lenders to enter into the Credit Agreement and the other Loan Documents and to make financial accommodations to Borrower as provided for in the Credit Agreement and the other Loan Documents, (b) the Cash Management Banks to enter into the Secured Cash Management Agreements, (c) the Hedge Banks to enter into the Secured Hedge Agreements, (d) the Noteholders to enter into the Note Agreement and the other Note Documents and to purchase the Senior Notes and (e) the Additional Pari Passu Lenders to enter into Additional Pari Passu Agreements, each Grantor has agreed to grant to Collateral Agent, for the benefit of the Secured Creditors, a continuing security interest in and to the Collateral in order to secure the prompt and complete payment, observance and performance of, among other things, the Senior Indebtedness; and

WHEREAS , each Grantor (other than the Borrower) is a Subsidiary of the Borrower and, as such, will benefit by virtue of the financial accommodations extended to the Borrower by the Secured Creditors.



NOW, THEREFORE , for and in consideration of the recitals made above and other good and valuable consideration, the receipt, sufficiency and adequacy of which are hereby acknowledged, the parties hereto agree as follows:

1.

Definitions; Construction .

(a)

All capitalized terms used herein (including in the preamble and recitals hereof) without definition shall have the meanings ascribed thereto in the Intercreditor Agreement.  Any terms (whether capitalized or lower case) used in this Agreement that are defined in the Code shall be construed and defined as set forth in the Code unless otherwise defined herein or in the Intercreditor Agreement; provided that to the extent that the Code is used to define any term used herein and if such term is defined differently in different Articles of the Code, the definition of such term contained in Article 9 of the Code shall govern.  In addition to those terms defined elsewhere in this Agreement, as used in this Agreement, the following terms shall have the following meanings:

(i)

“ Account ” means an account (as that term is defined in Article 9 of the Code).

(ii)

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

(iii)

“ Additional Pari Passu Agreement ” has the meaning specified therefor in the Intercreditor Agreement.

(iv)

“ Administrative Agent ” has the meaning specified therefor in the recitals to this Agreement.

(v)

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

(vi)

 “ Books ” means books and records (including each Grantor’s Records indicating, summarizing, or evidencing such Grantor’s assets (including the Collateral) or liabilities, each Grantor’s Records relating to such Grantor’s business operations or financial condition, and each Grantor’s goods or General Intangibles related to such information).

(vii)

“ Borrower ” has the meaning specified therefor in the recitals to this Agreement.

(viii)

“ Cash Collateralized Letters of Credit ” has the meaning specified therefor in the Credit Agreement as in effect on the date hereof.

(ix)

“ Cash Equivalents ” has the meaning specified therefor in the Credit Agreement as in effect on the date hereof.

(x)

“ Chattel Paper ” means chattel paper (as that term is defined in the Code), and includes tangible chattel paper and electronic chattel paper.

(xi)

“ Closing Date ” means December 3, 2014.

(xii)

“ Code ” means the New York Uniform Commercial Code, as in effect from time to time; provided , however , that in the event that, by reason of mandatory provisions of law,



2



any or all of the attachment, perfection, priority, or remedies with respect to the Collateral Agent’s Lien on any Collateral is governed by the Uniform Commercial Code as enacted and in effect in a jurisdiction other than the State of New York, the term “Code” shall mean the Uniform Commercial Code as enacted and in effect in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority, or remedies.

(xiii)

“ Collateral ” has the meaning specified therefor in Section 3 .

(xiv)

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

(xv)

“ Collateral Agent’s Lien ” means the Liens granted by the Borrower or its Subsidiaries to Collateral Agent hereunder for the benefit of the Secured Creditors.

(xvi)

“ Commercial Tort Claims ” means commercial tort claims (as that term is defined in the Code).

(xvii)

“ Copyrights ” means any and all rights in any works of authorship, including (A) copyrights and moral rights, (B) copyright registrations and recordings thereof and all applications in connection therewith, (C) income, license fees, royalties, damages, and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past, present, or future infringements thereof, (D) the right to sue for past, present, and future infringements thereof, and  (E) all of each Grantor’s rights corresponding thereto throughout the world.

(xviii)

“ Credit Agreement ” has the meaning specified therefor in the recitals to this Agreement.

(xix)

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

(xx)

“ Disclosure Letter ” means the disclosure letter dated as of the date hereof delivered by the Grantors to the Collateral Agent in respect of this Agreement.

(xxi)

“ Equipment ” means equipment (as that term is defined in the Code).

(xxii)

“ Equity Interests ” means (A) in the case of a corporation, capital stock, (B) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (C) in the case of a partnership, partnership interests (whether general or limited), (D) in the case of a limited liability company, membership interests, (E) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person and (F) any and all warrants, rights or options to purchase any of the foregoing.

(xxiii)

“ Event of Default ” has the meaning specified therefor in the Intercreditor Agreement.  

(xxiv)

“ Farm Products ” means farm products (as that term is defined in the Code).

(xxv)

“ Fixtures ” means fixtures (as that term is defined in the Code).



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(xxvi)

“ FSHCO ” has the meaning specified therefor in the Credit Agreement.  

(xxvii)

“ General Intangibles ” means general intangibles (as that term is defined in the Code).  

(xxviii)

“ Grantor ” and “ Grantors ” have the respective meanings specified therefor in the preamble to this Agreement.

(xxix)

“ Guarantied Obligations ” has the meaning specified therefor in the Guaranty Agreement.

(xxx)

“ Guarantors ” means the subsidiaries of the Borrower party to the Guaranty Agreements.

(xxxi)

“ Guaranty Agreements ” has the meaning specified therefor in the Intercreditor Agreement.

(xxxii)

“ Insolvency Proceeding ” means any proceeding commenced by or against any Person under any provision of the Bankruptcy Code or under any other state or federal bankruptcy or insolvency law, assignments for the benefit of creditors, formal or informal moratoria, compositions, extensions generally with creditors, or proceedings seeking reorganization, arrangement, or other similar relief.

(xxxiii)

“ Intellectual Property ” means any and all Patents, Copyrights, Trademarks, trade secrets, know-how, inventions (whether or not patentable), algorithms, software programs (including source code and object code), processes, product designs, industrial designs, blueprints, drawings, data, customer lists, URLs and domain names, specifications, documentations, reports, catalogs, literature, and any other forms of technology or proprietary information of any kind, including all rights therein and all applications for registration or registrations thereof.

(xxxiv)

“ Intellectual Property Licenses ” means, with respect to any Person (the “ Specified Party ”), (A) any licenses or other similar rights provided to the Specified Party in or with respect to Intellectual Property owned or controlled by any other Person, and (B) any licenses or other similar rights provided to any other Person in or with respect to Intellectual Property owned or controlled by the Specified Party, in each case, including any software license agreements (other than license agreements for commercially available off-the-shelf software that is generally available to the public which have been licensed to a Grantor pursuant to end-user licenses).

(xxxv)

“ Inventory ” means inventory (as that term is defined in the Code).

(xxxvi)

“ Investment Property ” means (A) any and all investment property (as that term is defined in the Code), and (B) any and all of the following (regardless of whether classified as investment property under the Code):  all Pledged Interests, Pledged Operating Agreements, and Pledged Partnership Agreements.

(xxxvii)

“ Joinder ” means each Joinder to this Agreement executed and delivered by Collateral Agent and each of the other parties listed on the signature pages thereto, in substantially the form of Annex 1 .

(xxxviii)

“ Lender ” and “ Lenders ” has the meaning specified therefor in the recitals to this Agreement.



4



(xxxix)

“ Lender Group ” means the Lenders, Noteholders and Additional Pari Passu Lenders.

(xl)

“ Loan Documents ” has the meaning specified therefor in the Credit Agreement as in effect on the date hereof.

(xli)

“ Negotiable Collateral ” means letters of credit, letter-of-credit rights, instruments, promissory notes, drafts and documents (as each such term is defined in the Code).

(xlii)

“ Note Agreement ” has the meaning specified therefor in the recitals to this Agreement.

(xliii)

“ Note Documents ” shall mean the “Transaction Documents” as defined in the Note Agreement as in effect on the date hereof.

(xliv)

“ Noteholders ” has the meaning specified therefor in the recitals to this Agreement.

(xlv)

“ Patents ” means patents and patent applications, including (A) all continuations, divisionals, continuations-in-part, re-examinations, reissues, and renewals thereof and improvements thereon, (B) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past, present, or future infringements thereof, (C) the right to sue for past, present, and future infringements thereof, and (D) all of each Grantor’s rights corresponding thereto throughout the world.

(xlvi)

“ Permitted Liens ” means any lien permitted pursuant to (A) Section 9.2 of the Credit Agreement, (B) Section 10.2 of the Note Agreement and (C) each Additional Pari Passu Agreement.

(xlvii)

 “ Pledged Companies ” means each Person listed on Schedule 1 to the Disclosure Letter as a “Pledged Company”, together with each other Person, all or a portion of whose Equity Interests are acquired or otherwise owned by a Grantor after the Closing Date and that are not held in a Securities Account.

(xlviii)

“ Pledged Interests ” means all of each Grantor’s right, title and interest in and to all of the Equity Interests now owned or hereafter acquired by such Grantor that are not held in a Securities Account, regardless of class or designation, including in each of the Pledged Companies, and all substitutions therefor and replacements thereof, all proceeds thereof and all rights relating thereto, also including any certificates representing the Equity Interests, the right to receive any certificates representing any of the Equity Interests, all warrants, options, share appreciation rights and other rights, contractual or otherwise, in respect thereof and the right to receive all dividends, distributions of income, profits, surplus, or other compensation by way of income or liquidating distributions, in cash or in kind, and all cash, instruments, and other property from time to time received, receivable, or otherwise distributed in respect of or in addition to, in substitution of, on account of, or in exchange for any or all of the foregoing.

(xlix)

“ Pledged Interests Addendum ” means a Pledged Interests Addendum substantially in the form of Annex 2 .



5



(l)

 “ Pledged Operating Agreements ” means all of each Grantor’s rights, powers, and remedies under the limited liability company operating agreements of each of the Pledged Companies that are limited liability companies.

(li)

“ Pledged Partnership Agreements ” means all of each Grantor’s rights, powers, and remedies under the partnership agreements of each of the Pledged Companies that are partnerships.

(lii)

“ Proceeds ” has the meaning specified therefor in Section 3 .

(liii)

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

(liv)

“ Secured Creditors ” means the Secured Parties, the Noteholders and any Additional Pari Passu Lenders.

(lv)

“ Secured Creditor Expenses ” means all expenses referenced in (A) Section 12.3 of the Credit Agreement, (B) Section 15 of the Note Agreement and (C) each Additional Pari Passu Agreement.

(lvi)

“ Secured Parties ” has the meaning set forth in the Credit Agreement as in effect on the date hereof.

(lvii)

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

(lviii)

“ Security Interest ” has the meaning specified therefor in Section 3 .

(lix)

“ Senior Indebtedness ” has the meaning set forth in the Intercreditor Agreement.

(lx)

“ Supporting Obligations ” means supporting obligations (as such term is defined in the Code), and includes letters of credit and guaranties issued in support of Accounts, Chattel Paper, documents, General Intangibles, instruments or Investment Property.

(lxi)

“ Trademarks ” means any and all trademarks, trade names, registered trademarks, trademark applications, service marks, registered service marks and service mark applications, including (A) all renewals thereof, (B) all income, royalties, damages and payments now and hereafter due or payable under and with respect thereto, including payments under all licenses entered into in connection therewith and damages and payments for past or future infringements or dilutions thereof, (C) the right to sue for past, present and future infringements and dilutions thereof, (D) the goodwill of each Grantor’s business symbolized by the foregoing or connected therewith, and (E) all of each Grantor’s rights corresponding thereto throughout the world.  

(lxii)

“ Triggering Event ” means, as of any date of determination, that an Event of Default has occurred as of such date.

(lxiii)

“ URL ” means “uniform resource locator,” an internet web address.

(b)

Unless the context of this Agreement clearly requires otherwise, references to the plural include the singular, references to the singular include the plural, the terms “includes” and  



6



“including” are not limiting, and the term “or” has, except where otherwise indicated, the inclusive meaning represented by the phrase “and/or.”  The words “hereof,” “herein,” “hereby,” “hereunder,” and similar terms in this Agreement refer to this Agreement as a whole and not to any particular provision of this Agreement.  Section, subsection, clause, schedule, and exhibit references herein are to this Agreement unless otherwise specified.  Any reference in this Agreement to any agreement, instrument, or document shall include all alterations, amendments, changes, extensions, modifications, renewals, replacements, substitutions, joinders, and supplements, thereto and thereof, as applicable.  The words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties.  Any reference herein to the satisfaction, repayment, or payment in full of the Senior Indebtedness shall mean (i) the payment or repayment in full in immediately available funds of (A)(1) the principal amount of, and interest accrued with respect to, all outstanding Loans, together with the payment of any premium applicable to the repayment of the Loans, (2) the principal amount of, interest and Excess Leverage Fee on, Make-Whole Amount or any other Obligations, in each case in this clause (2) as such terms are defined in the Note Agreement as in effect on the date hereof and (3) the principal amount of, and interest accrued with respect to, all outstanding Additional Pari Passu Indebtedness, together with the payment of any premium applicable to the repayment of the Additional Pari Passu Indebtedness, (B) all Secured Creditor Expenses for which invoices have been provided to the Borrower, and (C) all fees or charges that have accrued hereunder, under any other Credit Agreement, Note Agreement or any Additional Pari Passu Agreement and for which invoices have been provided to the Borrower, (ii) in the case of contingent reimbursement obligations with respect to Letters of Credit, providing Cash Collateral or standby letters of credit representing an amount equal to 102% of the value of outstanding Letters of Credit issued by Issuing Lender or delivery to Administrative Agent or Collateral Agent of duly executed documents evidencing the termination of all beneficiaries’ interests in such Letters of Credit, (iii) the receipt by Collateral Agent of Cash Collateral in order to secure any other contingent Senior Indebtedness for which a claim or demand for payment has been made at such time or in respect of matters or circumstances known to any Secured Creditor at the time that are reasonably expected to result in any loss, cost, damage or expense (including attorneys fees and legal expenses), such Cash Collateral to be in such amount as Collateral Agent reasonably determines is appropriate to secure such contingent Senior Indebtedness, (iv) the payment or repayment in full in immediately available funds of all other Senior Indebtedness (including the payment of any termination amount then applicable (or which would or could become applicable as a result of the repayment of the other Senior Indebtedness) under Hedge Agreements provided by Hedge Banks) other than (A) unasserted contingent indemnification obligations and any other obligations which pursuant to the terms of any Loan Document, any Transaction Document (as defined in the Note Agreement) or any Additional Pari Passu Agreement specifically survive repayment of the Loans for which no claim has been made, (B) any obligations arising under a Cash Management Agreement that, at such time, are allowed by the applicable Cash Management Bank to remain outstanding without being required to be repaid or cash collateralized and (C) any obligations arising under a Hedge Agreement that, at such time, are allowed by the applicable Hedge Bank to remain outstanding without being required to be repaid, and (v) the termination of all of the commitments of the Lenders.  Any reference herein to any Person shall be construed to include such Person’s successors and assigns.  

(c)

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

2.

[Reserved] .

3.

Grant of Security .  Each Grantor hereby unconditionally grants and pledges to Collateral Agent, for the benefit of each Secured Creditor, to secure the Senior Indebtedness, a continuing security interest (hereinafter referred to as the “ Security Interest ”) in all of such Grantor’s right, title, and interest



7



in and to the following, whether now owned or hereafter acquired or arising and wherever located (after giving effect to the exclusions set forth in this Section 3, the “ Collateral ”):

(a)

all of such Grantor’s Accounts;

(b)

all of such Grantor’s Books;

(c)

all of such Grantor’s Chattel Paper;

(d)

all of such Grantor’s Commercial Tort Claims;

(e)

all of such Grantor’s Deposit Accounts;

(f)

all of such Grantor’s Equipment;

(g)

all of such Grantor’s Farm Products;

(h)

all of such Grantor’s General Intangibles;

(i)

all of such Grantor’s Inventory;

(j)

all of such Grantor’s Investment Property;

(k)

all of such Grantor’s Intellectual Property and Intellectual Property Licenses;

(l)

all of such Grantor’s Negotiable Collateral;

(m)

all of such Grantor’s Pledged Interests (including all of such Grantor’s Pledged Operating Agreements and Pledged Partnership Agreements);

(n)

all of such Grantor’s Securities Accounts;

(o)

all of such Grantor’s Supporting Obligations;

(p)

all of such Grantor’s money, Cash Equivalents, or other assets of such Grantor that now or hereafter come into the possession, custody, or control of Collateral Agent (or its agent or designee) or any other Secured Creditor;

(q)

all other goods and personal property of such Grantor, whether tangible or intangible and wherever located; and

(r)

all of the proceeds (as such term is defined in the Code) and products, whether tangible or intangible, of any of the foregoing, including proceeds of insurance or Commercial Tort Claims covering or relating to any or all of the foregoing, and any and all Accounts, Books, Chattel Paper, Deposit Accounts, Equipment, Fixtures, General Intangibles, Inventory, Investment Property, Intellectual Property, Negotiable Collateral, Pledged Interests, Securities Accounts, Supporting Obligations, money, or other tangible or intangible property resulting from the sale, lease, license, exchange, collection, or other disposition of any of the foregoing, the proceeds of any award in condemnation with respect to any of the foregoing, any rebates or refunds, whether for taxes or otherwise, and all proceeds of any such proceeds, or any portion thereof or interest therein, and the proceeds thereof, and all proceeds of any loss of, damage to, or destruction of the above, whether insured or not insured, and, to the extent not otherwise included, any indemnity, warranty, or guaranty payable by reason of loss or damage to, or otherwise with



8



respect to any of the foregoing (the “ Proceeds ”).  Without limiting the generality of the foregoing, the term “Proceeds” includes whatever is receivable or received when Investment Property or proceeds are sold, exchanged, collected, or otherwise disposed of, whether such disposition is voluntary or involuntary, and includes proceeds of any indemnity or guaranty payable to any Grantor or Collateral Agent from time to time with respect to any of the Investment Property.

Notwithstanding anything contained in this Agreement to the contrary, the term “Collateral” shall not include: (i) voting Equity Interests of any First Tier Foreign Subsidiary or FSHCO owned by a Credit Party organized in the United States, solely to the extent that such Equity Interests represent more than 65% of the outstanding voting Equity Interests of such First Tier Foreign Subsidiary or FSHCO; provided , that with respect to any Foreign Subsidiary that is owned directly by a Grantor and (A) is treated as a disregarded entity for U.S. federal income tax purposes and (B) is not a FSHCO, such Grantor shall take all reasonable actions to cause such Foreign Subsidiary to grant and pledge to the Collateral Agent, for the benefit of the Secured Parties to secure the Senior Indebtedness, (x) 65% of the outstanding voting Equity Interests (and 100% of the non-voting Equity Interests) in any Foreign Subsidiary directly owned by such Foreign Subsidiary and (y) 100% of the outstanding Equity Interests in any Domestic Subsidiary directly owned by such Foreign Subsidiary; (ii) any rights or interest in any contract, lease, permit, license, or license agreement covering real or personal property of any Grantor if under the terms of such contract, lease, permit, license, or license agreement, or applicable law with respect thereto, the grant of a security interest or lien therein is prohibited as a matter of law or under the terms of such contract, lease, permit, license, or license agreement and such prohibition or restriction has not been waived or the consent of the other party to such contract, lease, permit, license, or license agreement has not been obtained (provided, that, (A) the foregoing exclusions of this clause (ii) shall in no way be construed (1) to apply to the extent that any described prohibition or restriction is ineffective under Section 9-406, 9-407, 9-408, or 9-409 of the Code or other applicable law, or (2) to apply to the extent that any consent or waiver has been obtained that would permit Collateral Agent’s security interest or lien to attach notwithstanding the prohibition or restriction on the pledge of such contract, lease, permit, license, or license agreement and (B) the foregoing exclusions of clauses (i) and (ii) shall in no way be construed to limit, impair, or otherwise affect any of Collateral Agent’s, any other Secured Creditor’s continuing security interests in and liens upon any rights or interests of any Grantor in or to (1) monies due or to become due under or in connection with any described contract, lease, permit, license, license agreement, or Equity Interests (including any Accounts or Equity Interests) or (2) any proceeds from the sale, license, lease, or other dispositions of any such contract, lease, permit, license, license agreement, or Equity Interests); (iii) any United States intent-to-use trademark applications to the extent that, and solely during the period in which, the grant of a security interest therein would impair the validity or enforceability of such intent-to-use trademark applications under applicable federal law, provided that upon submission and acceptance by the United States Patent and Trademark Office of an amendment to allege use pursuant to 15 U.S.C. Section 1060(a) (or any successor provision), such intent-to-use trademark application shall be considered Collateral; (iv) any asset of a Grantor with respect to which Collateral Agent deems (in its reasonable discretion) that the cost of obtaining a perfected Security Interest in such asset is excessive in relation to the value afforded thereby; (v) any assets to the extent a Security Interest in such assets could result in material adverse tax consequences as reasonably determined by the Borrower and the Collateral Agent; (vi) any property subject to a purchase money arrangement or Capital Leases; (vii) any governmental licenses or state or local franchises, charters and authorizations to the extent security interest is prohibited or restricted thereby (after giving effect to the applicable anti-assignment provisions of the Code or other applicable law), only for so long as the applicable license, franchise, charter or authorization prohibits the creation of a security interest therein; (viii) pledges and security interests prohibited or restricted by applicable law (including any requirement to obtain the consent of any governmental authority or third party); (ix) any real property whether fee owned or leasehold; (x) interests in joint ventures and non-wholly owned subsidiaries which cannot be pledged without the consent of third parties after giving effect to the applicable anti-assignment



9



provisions of the Code or other applicable law; or (xi) cash collateral pledged to secure the Cash Collateralized Letters of Credit.

4.

Security for Senior Indebtedness .  The Security Interest created hereby secures the payment and performance of the Senior Indebtedness, whether now existing or arising hereafter.  Without limiting the generality of the foregoing, this Agreement secures the payment of all amounts which constitute part of the Senior Indebtedness and would be owed by Grantors, or any of them, to Collateral Agent, the other Secured Creditors or any of them, but for the fact that they are unenforceable or not allowable (in whole or in part) as a claim in an Insolvency Proceeding involving any Grantor due to the existence of such Insolvency Proceeding.  

5.

Grantors Remain Liable .  Anything herein to the contrary notwithstanding, (a) each of the Grantors shall remain liable under the contracts and agreements included in the Collateral, including the Pledged Operating Agreements and the Pledged Partnership Agreements, to perform all of the duties and obligations thereunder to the same extent as if this Agreement had not been executed, (b) the exercise by any Secured Creditor of any of the rights hereunder shall not release any Grantor from any of its duties or obligations under such contracts and agreements included in the Collateral, and (c) none of the Secured Creditors shall have any obligation or liability under such contracts and agreements included in the Collateral by reason of this Agreement, nor shall any of the Secured Creditors be obligated to perform any of the obligations or duties of any Grantors thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.  Until an Event of Default shall occur and be continuing, except as otherwise provided in this Agreement, the Credit Agreement, the Note Agreement or any Additional Pari Passu Agreement, Grantors shall have the right to possession and enjoyment of the Collateral for the purpose of conducting the ordinary course of their respective businesses, subject to and upon the terms hereof and of the Credit Agreement, Note Agreement and any Additional Pari Passu Agreement.  Without limiting the generality of the foregoing, it is the intention of the parties hereto that record and beneficial ownership of the Pledged Interests, including all voting, consensual, dividend, and distribution rights, shall remain in the applicable Grantor until (i) the occurrence and continuance of an Event of Default and (ii) Collateral Agent has notified the applicable Grantor of Collateral Agent’s election to exercise such rights with respect to the Pledged Interests pursuant to Section 16 .  

6.

Representations and Warranties .  In order to induce Collateral Agent to enter into this Agreement for the benefit of the Secured Creditors, each Grantor makes the following representations and warranties to the Secured Creditors which shall be true and correct, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the Closing Date, and shall be true and correct, in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof), as of the date of the making of each loan (or other extension of credit) made thereafter, as though made on and as of the date of such loan (or other extension of credit) (except to the extent that such representations and warranties relate solely to an earlier date, in which case such representations and warranties shall be true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that already are qualified or modified by materiality in the text thereof) as of such earlier date) and such representations and warranties shall survive the execution and delivery of this Agreement:

(a)

As of the Closing Date, the name (within the meaning of Section 9-503 of the Code) and jurisdiction of organization of each Grantor and each of its Subsidiaries is set forth on Schedule 2 to the Disclosure Letter.  As of the Closing Date, each Grantor is (i) the type of entity disclosed next to its name on Schedule 2 to the Disclosure Letter, and (ii) a registered organization except to the extent disclosed on Schedule 3 to the Disclosure Letter.



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(b)

[Reserved].

(c)

As of the Closing Date, set forth on Schedule 2 to the Disclosure Letter is a list of any other legal names each Grantor has had in the past five (5) years, together with the date of the relevant name change.

(d)

As of the Closing Date, set forth on Schedule 2 to the Disclosure Letter is a list of all other names used by each Grantor in connection with any business or organization to which such Grantor became the successor by merger, consolidation, acquisition, change in form, nature or jurisdiction of organization or otherwise or on any filing with the Internal Revenue Service, in each case, at any time in the five (5) years preceding the Closing Date. Except as set forth on Schedule 2 to the Disclosure Letter, as of the Closing Date no Grantor has changed its jurisdiction of organization at any time during the past four (4) months.

(e)

As of the Closing Date, the chief executive office of each Grantor is located at the address indicated on Schedule 2 .  

(f)

Each Grantor’s tax identification numbers and organizational identification numbers, if any, are identified on Schedule 2 (as such Schedule may be updated from time to time).

(g)

[Reserved].

(h)

[Reserved].

(i)

This Agreement creates a valid security interest in the Collateral of each Grantor, to the extent a security interest therein can be created under the Code, securing the payment of the Senior Indebtedness.  Except to the extent a security interest in the Collateral cannot be perfected by the filing of a financing statement under the Code, all filings and other actions necessary or desirable to perfect and protect such security interest have been duly taken or will have been taken upon the filing of financing statements listing each applicable Grantor as a debtor and Collateral Agent as secured party in the jurisdictions listed next to such Grantor’s name on Schedule 3 to the Disclosure Letter.  Upon the making of such filings, Collateral Agent shall have a first priority perfected security interest in the Collateral of each Grantor to the extent such security interest can be perfected by the filing of a financing statement.  Upon filing of appropriate financing statements in the jurisdictions listed on Schedule 3 to the Disclosure Letter, all action necessary or desirable to protect and perfect the Security Interest in and on each Grantor’s Patents and Trademarks in the United States has been taken and such perfected Security Interest is enforceable as such against any and all creditors of, and purchasers from, any Grantor.

(j)

(i) Except for the Security Interest created hereby and transactions permitted under the Credit Agreement, the Note Agreement and each Additional Pari Passu Agreement, each Grantor is and will at all times be the sole holder of record and the legal and beneficial owner, free and clear of all Liens other than Permitted Liens, of (x) the Pledged Interests indicated on Schedule 1 to the Disclosure Letter as being owned by such Grantor and (y) when acquired by such Grantor, any Pledged Interests acquired after the Closing Date; (ii) all of the Pledged Interests are duly authorized and validly issued and, to the extent applicable, fully paid and nonassessable and the Pledged Interests constitute as of the Closing Date the percentage of the issued and outstanding Equity Interests of the Pledged Companies of such Grantor identified on Schedule 1 to the Disclosure Letter as supplemented or modified by any Pledged Interests Addendum or any Joinder to this Agreement; (iii) such Grantor has the right and requisite authority to pledge the Investment Property pledged by such Grantor to Collateral Agent as provided herein; (iv) as of the Closing Date, each Grantor has delivered to and deposited with Collateral Agent all certificates representing the Pledged Interests owned by such Grantor to the extent such Pledged



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Interests are represented by certificates, and undated powers (or other documents of transfer acceptable to Collateral Agent) endorsed in blank with respect to such certificates. None of the Pledged Interests owned or held by such Grantor has been issued or transferred in violation of any securities registration, securities disclosure, or similar laws of any jurisdiction to which such issuance or transfer may be subject.

(k)

No consent, approval, authorization, or other order or other action by, and no notice to or filing with, any Governmental Authority or any other Person is required (i) for the grant of a Security Interest by such Grantor in and to the Collateral pursuant to this Agreement or for the execution, delivery, or performance of this Agreement by such Grantor, or (ii) for the exercise by Collateral Agent of the voting or other rights provided for in this Agreement with respect to the Investment Property or the remedies in respect of the Collateral pursuant to this Agreement, except as may be required in connection with such disposition of Investment Property by laws affecting the offering and sale of securities generally and except for consents, approvals, authorizations, or other orders or actions that have been obtained or given (as applicable) and that are still in force.

(l)

As to all limited liability company or partnership interests issued under any Pledged Operating Agreement or Pledged Partnership Agreement, each Grantor hereby represents and warrants that the Pledged Interests issued pursuant to such agreement (A) are not dealt in or traded on securities exchanges or in securities markets, (B) do not constitute investment company securities and (C) are not held by such Grantor in a Securities Account.  In addition, none of the Pledged Operating Agreements, the Pledged Partnership Agreements, or any other agreements governing any of the Pledged Interests issued under any Pledged Operating Agreement or Pledged Partnership Agreement provide that such Pledged Interests are securities governed by Article 8 of the Uniform Commercial Code as in effect in any relevant jurisdiction.

7.

Covenants .  Each Grantor, jointly and severally, covenants and agrees with Collateral Agent that from and after the date of this Agreement and until the date of termination of this Agreement in accordance with Section 23 :

(a)

Intellectual Property .  

Grantors acknowledge and agree that the Secured Creditors shall have no duties with respect to any Intellectual Property or Intellectual Property Licenses of any Grantor.  Without limiting the generality of this Section 7(a) , Grantors acknowledge and agree that no Secured Creditor shall be under any obligation to take any steps necessary to preserve rights in the Collateral consisting of Intellectual Property or Intellectual Property Licenses against any other Person, but any member of the Lender Group may do so at its option from and after the occurrence and during the continuance of an Event of Default, and all expenses incurred in connection therewith (including reasonable fees and expenses of attorneys and other professionals) shall be for the sole account of Borrower and shall be chargeable to Borrower; and

(b)

Investment Property .  

(i)

If any Grantor shall acquire, obtain, receive or become entitled to receive any Pledged Interests after the Closing Date, it shall promptly (and in any event within twenty (20) Business Days of acquiring or obtaining such Collateral or such longer period of time as may be agreed by the Collateral Agent) deliver to Collateral Agent a duly executed Pledged Interests Addendum identifying such Pledged Interests;

(ii)

Upon the occurrence and during the continuance of an Event of Default, following the request of Collateral Agent, all sums of money and property paid or distributed in respect of



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the Investment Property that are received by any Grantor shall be held by the Grantors as agent acting on behalf of Collateral Agent for the benefit of the Secured Creditors segregated from such Grantor’s other property, and such Grantor shall deliver it forthwith to Collateral Agent in the exact form received;

(iii)

[Reserved];

(iv)

No Grantor shall make or consent to any amendment or other modification or waiver with respect to any Pledged Interests, Pledged Operating Agreement, or Pledged Partnership Agreement, or enter into any agreement or permit to exist any restriction with respect to any Pledged Interests if the same is prohibited pursuant to the Credit Agreement, Note Agreement or Additional Pari Passu Agreement;

(v)

As to all limited liability company or partnership interests issued under any Pledged Operating Agreement or Pledged Partnership Agreement, each Grantor hereby covenants that the Pledged Interests issued pursuant to such agreement: (A) are not and shall not be dealt in or traded on securities exchanges or in securities markets, (B) do not and will not constitute investment company securities and (C) are not and will not be held by such Grantor in a securities account.  In addition, none of the Pledged Operating Agreements, the Pledged Partnership Agreements, or any other agreements governing any of the Pledged Interests issued under any Pledged Operating Agreement or Pledged Partnership Agreement, provide or shall provide that such Pledged Interests are securities governed by Article 8 of the Uniform Commercial Code as in effect in any relevant jurisdiction.

(c)

Name, Etc .  No Grantor will change its name, organizational identification number or jurisdiction of organization; provided , that any Grantor may change its name, organizational identification number or jurisdiction of organization upon at least 10 days prior written notice to Collateral Agent of such change.

8.

Relation to Other Security Documents .  The provisions of this Agreement shall be read and construed with the Credit Agreement, Note Agreement and any Additional Pari Passu Agreement referred to below in the manner so indicated.

(a)

Credit Agreement . In the event of any conflict between any provision in this Agreement and a provision in the Credit Agreement, such provision of the Credit Agreement shall control.

(b)

Note Agreement . In the event of any conflict between any provision in this Agreement and a provision in the Note Agreement, such provision of the Note Agreement shall control.

(c)

Additional Pari Passu Agreement . In the event of any conflict between any provision in this Agreement and a provision in the Additional Pari Passu Agreement, such provision of the Additional Pari Passu Agreement shall control

(d)

Intercreditor Agreement . In the event of any conflict between any provision in this Agreement and a provision in the Intercreditor Agreement, such provision of the Intercreditor Agreement shall control.



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9.

Further Assurances .  

(a)

Each Grantor agrees that from time to time, at its own expense, such Grantor will promptly execute and deliver all further instruments and documents, and take all further action that Collateral Agent may reasonably request in order to perfect and protect the Security Interest granted hereby, to create, perfect or protect the Security Interest purported to be granted hereby or to enable Collateral Agent to exercise and enforce its rights and remedies hereunder with respect to any of the Collateral.  

(b)

Each Grantor authorizes the filing by Collateral Agent of financing or continuation statements, or amendments thereto, and such Grantor will execute and deliver to Collateral Agent such other instruments or notices as Collateral Agent may reasonably request in order to perfect and preserve the Security Interest granted or purported to be granted hereby.  

(c)

Each Grantor authorizes Collateral Agent at any time and from time to time to file, transmit or communicate, as applicable, financing statements and amendments (i) describing the Collateral as “all personal property of debtor” or “all assets of debtor” or words of similar effect, (ii) describing the Collateral as being of equal or lesser scope or with greater detail or (iii) that contain any information required by part 5 of Article 9 of the Code for the sufficiency or filing office acceptance.  Each Grantor also hereby ratifies any and all financing statements or amendments previously filed by Collateral Agent in any jurisdiction.

(d)

Each Grantor acknowledges that it is not authorized to file any financing statement or amendment or termination statement with respect to any financing statement filed in connection with this Agreement without the prior written consent of Collateral Agent, subject to such Grantor’s rights under Section 9-509(d)(2) of the Code.

(e)

Notwithstanding anything to the contrary in this Agreement, no Grantor be required, nor shall the Collateral Agent be authorized, (i) to perfect the Security Interest in the Collateral by any means other than by (A) filings pursuant to the Uniform Commercial Code in the office of the secretary of state (or similar central filing office) of the states of incorporation or formation of each Grantor or (B) delivery to the Collateral Agent to be held in its possession of all Collateral consisting of certificates evidencing certificated equity in the subsidiaries of any Grantor (other than Immaterial Subsidiaries and the equity interests of subsidiaries not required to be pledged) (and there shall be no requirement to certificate any equity interest that is not certificated), (ii) to take any action with respect to any assets located outside of the United States (it being understood that there shall be no security agreements or pledge agreements governed under the laws of any non-U.S. jurisdiction), or (iii) to enter into any deposit account control agreement or securities account control agreement with respect to any deposit account or securities account.

10.

Collateral Agent’s Right to Perform Contracts, Exercise Rights, etc .  Upon the occurrence and during the continuance of an Event of Default, Collateral Agent (or its designee) (a) may proceed to perform any and all of the obligations of any Grantor contained in any contract, lease or other agreement and exercise any and all rights of any Grantor therein contained as fully as such Grantor itself could, (b) to the extent permitted thereby, shall have the right to use any Grantor’s rights under Intellectual Property Licenses in connection with the enforcement of Collateral Agent’s rights hereunder, including the right to prepare for sale and sell any and all Inventory and Equipment now or hereafter owned by any Grantor and now or hereafter covered by such licenses, and (c) shall have the right to request that any Equity Interests that are pledged hereunder be registered in the name of Collateral Agent or any of its nominees.  



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11.

Collateral Agent Appointed Attorney-in-Fact .  Each Grantor hereby irrevocably appoints Collateral Agent its attorney-in-fact, with full authority in the place and stead of such Grantor and in the name of such Grantor or otherwise, at such time as an Event of Default has occurred and is continuing, to take any action and to execute any instrument which Collateral Agent may reasonably deem necessary or advisable to accomplish the purposes of this Agreement, including:

(a)

to ask, demand, collect, sue for, recover, compromise, receive and give acquittance and receipts for moneys due and to become due under or in connection with the Accounts or any other Collateral of such Grantor;

(b)

to receive, indorse and collect any drafts or other instruments, documents, Negotiable Collateral or Chattel Paper;

(c)

to file any claims or take any action or institute any proceedings which Collateral Agent may deem necessary or desirable for the collection of any of the Collateral of such Grantor or otherwise to enforce the rights of Collateral Agent with respect to any of the Collateral;

(d)

to repair, alter, or supply goods, if any, necessary to fulfill in whole or in part the purchase order of any Person obligated to such Grantor in respect of any Account of such Grantor;

(e)

to the extent grantable by such Grantor without breaching or violating any agreement) an irrevocable, non-exclusive license (subject, in the case of trademarks, to sufficient rights to quality control and inspection in favor of such Grantor to avoid the risk of invalidation of such Trademarks and, in the case of trade secrets, to an obligation of Collateral Agent to take reasonable steps under the circumstances to keep the trade secrets confidential to avoid the risk of invalidation of such trade secrets, to use any Intellectual Property or Intellectual Property Licenses of such Grantor, including but not limited to any labels, Patents, Trademarks, trade names, URLs, domain names, industrial designs, Copyrights, or advertising matter, in preparing for sale, advertising for sale or selling Inventory or other Collateral and to collect any amounts due under Accounts, contracts or Negotiable Collateral of such Grantor; and

(f)

Collateral Agent, on behalf of the Secured Creditors, shall have the right, but shall not be obligated, to bring suit in its own name to enforce the Intellectual Property and Intellectual Property Licenses and, if Collateral Agent shall commence any such suit, the appropriate Grantor shall, at the request of Collateral Agent, do any and all lawful acts and execute any and all proper documents reasonably required by Collateral Agent in aid of such enforcement.  

To the extent permitted by law, each Grantor hereby ratifies all that such attorney-in-fact shall lawfully do or cause to be done by virtue hereof.  This power of attorney is coupled with an interest and shall be irrevocable until this Agreement is terminated, and shall terminate automatically when this Agreement is terminated.  

12.

Collateral Agent May Perform .  If any Grantor fails to perform any agreement contained herein, Collateral Agent may itself perform, or cause performance of, such agreement, and the reasonable and documented expenses of Collateral Agent incurred in connection therewith shall be payable, jointly and severally, by all Grantors.

13.

Collateral Agent’s Duties .  The powers conferred on Collateral Agent hereunder are solely to protect Collateral Agent’s interest in the Collateral, for the benefit of the Secured Creditors, and shall not impose any duty upon Collateral Agent to exercise any such powers.  Except for the safe custody of any Collateral in its actual possession and the accounting for moneys actually received by it hereunder, Collateral Agent shall have no duty as to any Collateral or as to the taking of any necessary steps to



15





preserve rights against prior parties or any other rights pertaining to any Collateral.  Collateral Agent shall be deemed to have exercised reasonable care in the custody and preservation of any Collateral in its actual possession if such Collateral is accorded treatment substantially equal to that which Collateral Agent accords its own property.  

14.

Collection of Accounts, General Intangibles and Negotiable Collateral .  At any time upon the occurrence and during the continuance of an Event of Default, Collateral Agent or Collateral Agent’s designee may (a) notify Account Debtors of any Grantor that the Accounts, General Intangibles, Chattel Paper or Negotiable Collateral of such Grantor have been assigned to Collateral Agent, for the benefit of the Secured Creditors, or that Collateral Agent has a security interest therein, and (b) collect the Accounts, General Intangibles and Negotiable Collateral of any Grantor directly, and any collection costs and expenses shall constitute part of such Grantor’s Senior Indebtedness.  

15.

Disposition of Pledged Interests by Collateral Agent .  To the extent any of the Pledged Interests have not been registered or qualified under the various federal or state securities laws of the United States, the disposition thereof after an Event of Default may be restricted to one or more private (instead of public) sales in view of the lack of such registration.  Each Grantor understands that in connection with such disposition, Collateral Agent may approach only a restricted number of potential purchasers and further understands that a sale under such circumstances may yield a lower price for the Pledged Interests than if the Pledged Interests were registered and qualified pursuant to federal and state securities laws and sold on the open market.  Each Grantor, therefore, agrees that:  (a) if Collateral Agent shall, pursuant to the terms of this Agreement, sell or cause the Pledged Interests or any portion thereof to be sold at a private sale, Collateral Agent shall have the right to rely upon the advice and opinion of any nationally recognized brokerage or investment firm (but shall not be obligated to seek such advice and the failure to do so shall not be considered in determining the commercial reasonableness of such action) as to the best manner in which to offer the Pledged Interest or any portion thereof for sale and as to the best price reasonably obtainable at the private sale thereof; and (b) such reliance shall be conclusive evidence that Collateral Agent has handled the disposition in a commercially reasonable manner.

16.

Voting and Other Rights in Respect of Pledged Interests .

(a)

Upon the occurrence and during the continuation of an Event of Default, (i) Collateral Agent may, at its option, and with two (2) Business Days prior notice to any Grantor, and in addition to all rights and remedies available to Collateral Agent under any other agreement, at law, in equity, or otherwise, exercise all voting rights or any other ownership or consensual rights (including any dividend or distribution rights) in respect of the Pledged Interests owned by such Grantor, but under no circumstances is Collateral Agent obligated by the terms of this Agreement to exercise such rights, and (ii) if Collateral Agent duly exercises its right to vote any of such Pledged Interests, each Grantor hereby appoints Collateral Agent, such Grantor’s true and lawful attorney-in-fact and IRREVOCABLE PROXY to vote such Pledged Interests in any manner Collateral Agent deems advisable for or against all matters submitted or which may be submitted to a vote of shareholders, partners or members, as the case may be.  The power-of-attorney and proxy granted hereby is coupled with an interest and shall be irrevocable.

(b)

For so long as any Grantor shall have the right to vote the Pledged Interests owned by it, such Grantor covenants and agrees that it will not, without the prior written consent of Collateral Agent, vote or take any consensual action with respect to such Pledged Interests which would materially adversely affect the rights of Collateral Agent, the other Secured Creditors or the value of the Pledged Interests.

17.

Remedies .  Upon the occurrence and during the continuance of an Event of Default:



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(a)

Collateral Agent may, and at the instruction of the Required Senior Lenders shall, exercise in respect of the Collateral, in addition to other rights and remedies of the Collateral Agent or any Secured Creditor provided for herein, in the Credit Agreement, Note Agreement and any Additional Pari Passu Agreement or otherwise available to it, all the rights and remedies of a secured party on default under the Code or any other applicable law.  Without limiting the generality of the foregoing, each Grantor expressly agrees that, in any such event, Collateral Agent without demand of performance or other demand, advertisement or notice of any kind (except a notice specified below of time and place of public or private sale) to or upon any Grantor or any other Person (all and each of which demands, advertisements and notices are hereby expressly waived to the maximum extent permitted by the Code or any other applicable law), may take immediate possession of all or any portion of the Collateral and (i) require Grantors to, and each Grantor hereby agrees that it will at its own expense and upon request of Collateral Agent forthwith, assemble all or part of the Collateral as directed by Collateral Agent and make it available to Collateral Agent at one or more locations where such Grantor regularly maintains Inventory and (ii) without notice, except as specified below, sell the Collateral or any part thereof in one or more parcels at public or private sale, at any of Collateral Agent’s offices or elsewhere, for cash, on credit, and upon such other terms as Collateral Agent may deem commercially reasonable.  Each Grantor agrees that, to the extent notification of sale shall be required by law, at least ten (10) days notification by mail to the applicable Grantor of the time and place of any public sale or the time after which any private sale is to be made shall constitute reasonable notification and specifically such notification shall constitute a reasonable “authenticated notification of disposition” within the meaning of Section 9-611 of the Code.  Collateral Agent shall not be obligated to make any sale of Collateral regardless of notification of sale having been given.  Collateral Agent may adjourn any public sale from time to time by announcement at the time and place fixed therefor, and such sale may, without further notice, be made at the time and place to which it was so adjourned.  Each Grantor agrees that (A) the internet shall constitute a “place” for purposes of Section 9-610(b) of the Code and (B) to the extent notification of sale shall be required by law, notification by mail of the URL where a sale will occur and the time when a sale will commence at least ten (10) days prior to the sale shall constitute a reasonable notification for purposes of Section 9-611(b) of the Code.  Each Grantor agrees that any sale of Collateral to a licensor pursuant to the terms of a license agreement between such licensor and a Grantor is sufficient to constitute a commercially reasonable sale (including as to method, terms, manner, and time) within the meaning of Section 9-610 of the Code.

(b)

Collateral Agent is hereby granted (to the extent grantable by such Grantor without breaching or violating any agreement) an irrevocable, non-exclusive license (subject, in the case of trademarks, to sufficient rights to quality control and inspection in favor of such Grantor to avoid the risk of invalidation of such trademarks and, in the case of trade secrets, to an obligation of Collateral Agent to take reasonable steps under the circumstances to keep the trade secrets confidential to avoid the risk of invalidation of such trade secrets) a nonexclusive license or other right to use, without liability for royalties or any other charge, each Grantor’s Intellectual Property, including but not limited to, any labels, Patents, Trademarks, trade names, URLs, domain names, industrial designs, Copyrights and advertising matter, whether owned by any Grantor or with respect to which any Grantor has rights under license, sublicense, or other agreements (including any Intellectual Property License), as it pertains to the Collateral, in preparing for sale, advertising for sale and selling any Collateral, and each Grantor’s rights under all licenses and all franchise agreements shall inure to the benefit of Collateral Agent.

(c)

Any cash held by Collateral Agent as Collateral and all cash proceeds received by Collateral Agent in respect of any sale of, collection from, or other realization upon all or any part of the Collateral shall be applied against the Senior Indebtedness as set forth in the Intercreditor Agreement.   In the event the proceeds of Collateral are insufficient to satisfy all of the Senior Indebtedness in full, each Grantor shall remain jointly and severally liable for any such deficiency.



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(d)

Each Grantor hereby acknowledges that the Senior Indebtedness arises out of a commercial transaction and agrees that if an Event of Default shall occur and be continuing, Collateral Agent shall have the right to an immediate writ of possession without notice of a hearing.  Collateral Agent shall have the right to the appointment of a receiver for the properties and assets of each Grantor, and each Grantor hereby consents to such rights and such appointment and hereby waives any objection such Grantor may have thereto or the right to have a bond or other security posted by Collateral Agent.

18.

Remedies Cumulative .  Each right, power, and remedy of Collateral Agent and any other Secured Creditor, as provided for in this Agreement, the Credit Agreement, Note Agreement, any Additional Pari Passu Agreement, any Secured Hedge Agreement, any Secured Cash Management Agreement or the other documents related thereto, now or hereafter existing at law or in equity or by statute or otherwise, shall be cumulative and concurrent and shall be in addition to every other right, power or remedy provided for in this Agreement, the Credit Agreement, Note Agreement, any Additional Pari Passu Agreement, the Secured Hedge Agreements, the Secured Cash Management Agreements, any Secured Cash Management Agreement, or the other documents related thereto now or hereafter existing at law or in equity or by statute or otherwise, and the exercise or beginning of the exercise by Collateral Agent or any other Secured Creditors of any one or more of such rights, powers or remedies shall not preclude the simultaneous or later exercise by Collateral Agent or such other Secured Creditor of any or all other rights, powers or remedies.

19.

Marshaling . Collateral Agent shall not be required to marshal any present or future collateral security (including but not limited to the Collateral) for, or other assurances of payment of, the Senior Indebtedness or any of them or to resort to such collateral security or other assurances of payment in any particular order, and all of its rights and remedies hereunder and in respect of such collateral security and other assurances of payment shall be cumulative and in addition to all other rights and remedies, however existing or arising.  To the extent that it lawfully may, each Grantor hereby agrees that it will not invoke any law relating to the marshaling of collateral which might cause delay in or impede the enforcement of Collateral Agent’s rights and remedies under this Agreement or under any other instrument creating or evidencing any of the Senior Indebtedness or under which any of the Senior Indebtedness is outstanding or by which any of the Senior Indebtedness is secured or payment thereof is otherwise assured, and, to the extent that it lawfully may, each Grantor hereby irrevocably waives the benefits of all such laws.

20.

Indemnity and Expenses .  

(a)

Each Grantor, as though a party to the Credit Agreement, hereby acknowledges and agrees that the indemnity in favor of the Collateral Agent in Section 12.3(b) of the Credit Agreement shall cover Indemnified Liabilities growing out of or resulting from this Agreement.  This provision shall survive the termination of this Agreement and the Credit Agreement, Note Agreement or Additional Pari Passu Agreement, as applicable, and the repayment of the Senior Indebtedness.

(b)

Grantors, jointly and severally, shall, upon demand, pay to Collateral Agent (or Collateral Agent, may charge to Borrower) all expenses, as described in Section 12.3 of the Credit Agreement, which Collateral Agent may incur in connection with (i) the administration of this Agreement, (ii) the custody, preservation, use or operation of, or, upon an Event of Default, the sale of, collection from, or other realization upon, any of the Collateral in accordance with this Agreement, the Credit Agreement, Note Agreement or any Additional Pari Passu Agreement, (iii) the exercise or enforcement of any of the rights of Collateral Agent hereunder or (iv) the failure by any Grantor to perform or observe any of the provisions hereof.



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21.

Merger, Amendments; Etc.  THIS AGREEMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS (AS DEFINED IN THE CREDIT AGREEMENT) AND THE TRANSACTION DOCUMENTS (AS DEFINED IN THE NOTE AGREEMENT), REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN AGREEMENTS BETWEEN THE PARTIES IN RESPECT OF THE SUBJECT MATTER HEREOF.  No waiver of any provision of this Agreement, and no consent to any departure by any Grantor herefrom, shall in any event be effective unless the same shall be in writing and signed by Collateral Agent, and then such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given.  No amendment of any provision of this Agreement shall be effective unless the same shall be in writing and signed by Collateral Agent and each Grantor to which such amendment applies.

22.

Addresses for Notices .  All notices and other communications provided for hereunder shall be given in the form and manner and delivered to Collateral Agent at its address specified in the Intercreditor Agreement, and to any of the Grantors at their respective addresses specified in the Intercreditor Agreement or herein, as applicable, or, as to any party, at such other address as shall be designated by such party in a written notice to the other party.

23.

Continuing Security Interest: Assignments under Credit Agreement.  

(a)

This Agreement shall create a continuing security interest in the Collateral and shall (i) remain in full force and effect until the Senior Indebtedness have been paid in full in accordance with the provisions of the Credit Agreement, Note Agreement and any Additional Pari Passu Agreement, and any commitments thereunder, have expired or have been terminated, (ii) be binding upon each Grantor and its respective successors and assigns and (iii) inure to the benefit of, and be enforceable by Collateral Agent and its successors, transferees and assigns.  Without limiting the generality of the foregoing clause (iii), any member of the Lender Group may, in accordance with the provisions of the Credit Agreement, Note Agreement or Additional Pari Passu Agreement, as applicable, assign or otherwise transfer all or any portion of its rights and obligations under the Credit Agreement, Note Agreement or Additional Pari Passu Agreement to any other Person, and such other Person shall thereupon become vested with all the benefits in respect thereof granted to such member of the Lender Group herein or otherwise.  Upon payment in full of the Senior Indebtedness in accordance with the provisions of the Credit Agreement, the Note Agreement and Additional Pari Passu Agreement and the expiration or termination of the commitments thereunder, the Security Interest granted hereby shall automatically terminate and all rights to the Collateral shall revert to Grantors or any other Person entitled thereto.  At such time, upon Borrower’s request, Collateral Agent will authorize the filing of appropriate termination statements to terminate such Security Interest, will return to the applicable Grantors the Collateral in its possession and take any other actions reasonably requested by any Grantor to evidence the release of the security interest created hereby.  No transfer or renewal, extension, assignment or termination of this Agreement or of the Credit Agreement, Note Agreement or any Additional Pari Passu Agreement or any other instrument or document executed and delivered by any Grantor to Collateral Agent nor any additional loans made by any member of the Lender Group to Borrower, nor the taking of further security, nor the retaking or re-delivery of the Collateral to Grantors, or any of them, by Collateral Agent, nor any other act of the Secured Creditors, or any of them, shall release any Grantor from any obligation under this Agreement, except a release or discharge executed in writing by Collateral Agent in accordance with the provisions of the Credit Agreement, the Note Agreement and any Additional Pari Passu Agreement.  Collateral Agent shall not by any act, delay, omission or otherwise, be deemed to have waived any of its rights or remedies hereunder, unless such waiver is in writing and signed by Collateral Agent and then only to the extent therein set forth.  A waiver by Collateral Agent of any right or remedy



19





on any occasion shall not be construed as a bar to the exercise of any such right or remedy which Collateral Agent would otherwise have had on any other occasion.

(b)

Each Grantor agrees that, if any payment made by any Grantor or other Person and applied to the Senior Indebtedness is at any time annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required to be refunded or repaid, or the proceeds of any Collateral are required to be returned by Collateral Agent or any member of the Lender Group to such Grantor, its estate, trustee, receiver or any other party, including any Grantor, under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or repayment, any Lien or other Collateral securing such liability shall be and remain in full force and effect, as fully as if such payment had never been made. If, prior to any of the foregoing, any Lien or other Collateral securing such Grantor’s liability hereunder shall have been released or terminated by virtue of the foregoing clause (a), such Lien, other Collateral or provision shall be reinstated in full force and effect and such prior release, termination, cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the obligations of any such Grantor in respect of any Lien or other Collateral securing such obligation or the amount of such payment.

24.

Survival .   All representations and warranties made by the Grantors in this Agreement and in the certificates or other instruments delivered in connection with or pursuant to this Agreement shall be considered to have been relied upon by the other parties hereto and shall survive the execution and delivery of this Agreement and the making of any loans and issuance of any Letters of Credit, regardless of any investigation made by any such other party or on its behalf and notwithstanding that Collateral Agent, Issuing Lender or any member of the Lender Group may have had notice or knowledge of any Default or Event of Default or incorrect representation or warranty at the time any credit is extended hereunder, and shall continue in full force and effect as long as the principal of, or any accrued interest on, any loan or any fee or any other amount payable under the Credit Agreement, Note Agreement, or any Additional Pari Passu Agreement is outstanding and unpaid or any Letter of Credit is outstanding and so long as the commitments have not expired or terminated.  

25.

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

(a)

THE VALIDITY OF THIS AGREEMENT, THE CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT HEREOF, THE RIGHTS OF THE PARTIES HERETO WITH RESPECT TO ALL MATTERS ARISING HEREUNDER OR RELATED HERETO, AND ANY CLAIMS, CONTROVERSIES OR DISPUTES ARISING HEREUNDER OR RELATED HERETO SHALL BE DETERMINED UNDER, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

(b)

THE PARTIES AGREE THAT ALL ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED AND LITIGATED ONLY IN THE STATE AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, FEDERAL COURTS LOCATED IN THE COUNTY OF NEW YORK, STATE OF NEW YORK; PROVIDED, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT COLLATERAL AGENT’S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE COLLATERAL AGENT ELECTS TO BRING SUCH ACTION OR WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND.  EACH GRANTOR AND COLLATERAL AGENT WAIVE, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 25(b) .



20





(c)

TO THE MAXIMUM EXTENT PERMITTED BY APPLICABLE LAW, EACH GRANTOR AND COLLATERAL AGENT HEREBY WAIVE THEIR RESPECTIVE RIGHTS, IF ANY, TO A JURY TRIAL OF ANY CLAIM, CONTROVERSY, DISPUTE OR CAUSE OF ACTION DIRECTLY OR INDIRECTLY BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS (EACH A “ CLAIM ”).  EACH GRANTOR AND COLLATERAL AGENT REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

(d)

EACH GRANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS  LOCATED IN THE COUNTY OF NEW YORK AND THE STATE OF NEW YORK, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT.  EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW.  NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT COLLATERAL AGENT MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT AGAINST ANY GRANTOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(e)

NO CLAIM MAY BE MADE BY ANY GRANTOR AGAINST THE COLLATERAL AGENT, THE SWINGLINE LENDER, ISSUING LENDER OR ANY OTHER LENDER, OR ANY AFFILIATE, DIRECTOR, OFFICER, EMPLOYEE, COUNSEL, REPRESENTATIVE, COLLATERAL AGENT OR ATTORNEY-IN-FACT OF ANY OF THEM FOR ANY SPECIAL, INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES IN RESPECT OF ANY CLAIM FOR BREACH OF CONTRACT OR ANY OTHER THEORY OF LIABILITY ARISING OUT OF OR RELATED TO THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT, OR ANY ACT, OMISSION, OR EVENT OCCURRING IN CONNECTION HEREWITH, AND EACH GRANTOR HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE UPON ANY CLAIM FOR SUCH DAMAGES, WHETHER OR NOT ACCRUED AND WHETHER OR NOT KNOWN OR SUSPECTED TO EXIST IN ITS FAVOR.

26.

New Subsidiaries .  Pursuant to the terms of the Credit Agreement, the Note Agreement and any Additional Pari Passu Agreement, certain Subsidiaries (whether by acquisition or creation) of any Grantor are required to enter into this Agreement by executing and delivering in favor of Collateral Agent a Joinder to this Agreement in substantially the form of Annex 1 .  Upon the execution and delivery of Annex 1 by any such new Subsidiary, such Subsidiary shall become a Grantor hereunder with the same force and effect as if originally named as a Grantor herein.  The execution and delivery of any instrument adding an additional Grantor as a party to this Agreement shall not require the consent of any party hereunder.  The rights and obligations of each Grantor hereunder shall remain in full force and effect notwithstanding the addition of any new Grantor hereunder.

27.

Collateral Agent .  Each reference herein to any right granted to, benefit conferred upon or power exercisable by the “Collateral Agent” shall be a reference to Collateral Agent, for the benefit of each Secured Creditor.



21





28.

Miscellaneous .

(a)

This Agreement is a Collateral Document under the Intercreditor Agreement, a Loan Document under the Credit Agreement and a Transaction Document under the Note Agreement  This Agreement may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original and all of which, when taken together, shall constitute one and the same Agreement.  Delivery of an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission shall be equally as effective as physical delivery of an original executed counterpart of this Agreement.  Any party delivering an executed counterpart of this Agreement by telefacsimile or other electronic method of transmission also shall deliver a physical original executed counterpart of this Agreement, but the failure to deliver such an original executed counterpart shall not affect the validity, enforceability and binding effect of this Agreement.  

(b)

Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction shall be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof in such jurisdiction or affecting the validity or enforceability of such provision in any other jurisdiction.  Each provision of this Agreement shall be severable from every other provision of this Agreement for the purpose of determining the legal enforceability of any specific provision.

(c)

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

(d)

Neither this Agreement nor any uncertainty or ambiguity herein shall be construed against any Secured Creditor, whether under any rule of construction or otherwise.  This Agreement has been reviewed by all parties and shall be construed and interpreted according to the ordinary meaning of the words used so as to accomplish fairly the purposes and intentions of all parties hereto.

[signature pages follow]




22





IN WITNESS WHEREOF, the undersigned parties hereto have caused this Agreement to be executed and delivered as of the day and year first above written.

GRANTORS:

COPART, INC.

 

 

 

 

By:

/s/ Paul A. Styer

 

 

Name:  Paul A. Styer

 

 

Title: Senior Vice President, General Counsel and

 

 

Secretary

 

 

 

 

COPART OF CONNECTICUT, INC.

 

 

 

 

 

 

 

By:

/s/ Paul A. Styer

 

 

Name:  Paul A. Styer

 

 

Title:  Secretary

 

 

 

 

 

 

 

COPART OF OKLAHOMA, INC.

 

 

 

 

 

 

 

By:

/s/ Paul A. Styer

 

 

Name:  Paul A. Styer

 

 

Title:  Secretary

 

 

 

 

 

 

 

COPART OF WASHINGTON, INC.

 

 

 

 

 

 

 

By:

/s/ Paul A. Styer

 

 

Name:  Paul A. Styer

 

 

Title:  Secretary

 

 

 

 

 

 

 

COPART OF KANSAS, INC.

 

 

 

 

 

 

 

By:

/s/ Paul A. Styer

 

 

Name:  Paul A. Styer

 

 

Title:  Secretary

 

 

 

 

 

 

 

COPART OF TENNESSEE, INC.

 

 

 

 

 

 

 

By:

/s/ Paul A. Styer

 

 

Name:  Paul A. Styer

 

 

Title:  Secretary




S ECURITY A GREEMENT




 

VB2, INC.

 

 

 

 

 

 

 

By:

/s/ Paul A. Styer

 

 

Name:  Paul A. Styer

 

 

Title:  Secretary

 

 

 

 

 

 

 

COPART OF MISSOURI, INC.

 

 

 

 

 

 

 

By:

/s/ Paul A. Styer

 

 

Name:  Paul A. Styer

 

 

Title:  Secretary

 

 

 

 

 

 

 

HOUSTON COPART SALVAGE AUTO

 

AUCTIONS LIMITED PARTNERSHIP

 

 

 

 

By:

Copart of Houston, Inc., its General Partner

 

 

 

 

 

 

 

By:

/s/ Paul A. Styer

 

 

Name:  Paul A. Styer

 

 

Title:  Secretary

 

 

 

 

 

 

 

DALLAS COPART SALVAGE AUTO AUCTIONS

 

LIMITED PARTNERSHIP, INC.

 

 

 

 

By:

Copart of Texas, Inc., its General Partner

 

 

 

 

 

 

 

By:

/s/ Paul A. Styer

 

 

Name:  Paul A. Styer

 

 

Title:  Secretary

 

 

 

 

 

 

 

COPART OF LOUISIANA, INC.

 

 

 

 

 

 

 

By:

/s/ Paul A. Styer

 

 

Name:  Paul A. Styer

 

 

Title:  Secretary




G UARANTY AND S ECURITY A GREEMENT






 

COPART OF ARKANSAS, INC.

 

 

 

 

 

 

 

By:

/s/ Paul A. Styer

 

 

Name:  Paul A. Styer

 

 

Title:  Secretary

 

 

 

 

 

 

 

COPART OF ARIZONA, INC.

 

 

 

 

 

 

 

By:

/s/ Paul A. Styer

 

 

Name:  Paul A. Styer

 

 

Title:  Secretary




G UARANTY AND S ECURITY A GREEMENT







COLLATERAL AGENT:

WELLS FARGO BANK, NATIONAL ASSOCIATION

 

 

 

 

 

 

 

By:  

/s/ Jason Ford

 

 

Name: Jason Ford

 

 

Title: Vice President






S ECURITY A GREEMENT





ANNEX 1 TO SECURITY AGREEMENT
FORM OF JOINDER

Joinder No. ____ (this “ Joinder ”), dated as of ____________ 20___, to the Security Agreement, dated as of December 3, 2014 (as amended, restated, supplemented, or otherwise modified from time to time, the “ Security Agreement ”), by and among each of the parties listed on the signature pages thereto and those additional entities that thereafter become parties thereto (collectively, jointly and severally, “ Grantors ” and each, individually, a “ Grantor ”) and WELLS FARGO BANK, NATIONAL ASSOCIATION , in its capacity as Collateral Agent for the Lenders, the Hedge Banks, the Cash Management Banks, the Noteholders and any Additional Pari Passu Lenders (in such capacity, together with its successors and assigns in such capacity, “ Collateral Agent ”).

W I T N E S S E T H:

WHEREAS , pursuant to that certain Credit Agreement dated as of December 3, 2014 (as amended, restated, supplemented, or otherwise modified from time to time, the “ Credit Agreement ”), by and among COPART, INC. , a Delaware corporation (the “ Borrower ”), the banks and other financial institutions from time to time party thereto (the “ Lenders ”) and WELLS FARGO BANK, NATIONAL ASSOCIATION , as administrative agent (in such capacity, “ Administrative Agent ”), the Lenders have agreed to make certain financial accommodations available to Borrower from time to time pursuant to the terms and conditions thereof;


WHEREAS , pursuant to the note purchase agreement dates as of December 3, 2014 (as amended, restated, supplemented, or otherwise modified from time to time, the “ Note Agreement ”), among the Borrower and the purchasers listed on Schedule B thereto (together with their permitted successors and assigns, the “ Noteholders ”),  Borrower is issuing and selling $400.0 million aggregate principal amount of senior secured notes (the “ Senior Notes ”);; and


WHEREAS , the Administrative Agent, the Noteholders and the Collateral Agent have entered into an Intercreditor and Collateral Agency Agreement dated as of December 3, 2014 (as amended, restated, supplemented, or otherwise modified from time to time, the “ Intercreditor Agreement ”) governing their respective rights as creditors of the Grantors and appointing the Collateral Agent as agent for the Secured Creditors (as defined below) with respect to the collateral securing the Senior Indebtedness (as defined below);

WHEREAS , in order to induce (a) the Lenders to enter into the Credit Agreement and the other Loan Documents and to make financial accommodations to Borrower as provided for in the Credit Agreement and the other Loan Documents, (b) the Cash Management Banks to enter into the Secured Cash Management Agreements, (c) the Hedge Banks to enter into the Secured Hedge Agreements, (d) the Noteholders to enter into the Note Agreement and the other Note Documents and to purchase the Senior Notes and (e) the Additional Pari Passu Lenders to enter into any Additional Pari Passu Agreements, each Grantor has agreed to grant to Collateral Agent, for the benefit of the Secured Creditors, a continuing security interest in and to the Collateral in order to secure the prompt and complete payment, observance and performance of, among other things, the Senior Indebtedness; and

WHEREAS , each Grantor (other than the Borrower) is a Subsidiary of the Borrower and, as such, will benefit by virtue of the financial accommodations extended to the Borrower by the Secured Creditors.

WHEREAS, capitalized terms used herein and not otherwise defined herein shall have the meanings assigned to such terms in the Security Agreement or, if not defined therein, in the Intercreditor Agreement, and this Joinder shall be subject to the rules of construction set forth in








Section 1(b) of the Security Agreement, which rules of construction are incorporated herein by this reference, mutatis mutandis ; and

WHEREAS , pursuant to the terms of the Credit Agreement, Note Agreement, Additional Pari Passu Agreements and the Security Agreement, certain Subsidiaries of the Credit Parties, must execute and deliver certain documents, including the Security Agreement, and the joinder to the Security Agreement by the undersigned new Grantor or Grantors (collectively, the “ New Grantors ”) may be accomplished by the execution of this Joinder in favor of Collateral Agent, for the benefit of the Secured Creditors; and

WHEREAS , each New Grantor (a) is an Affiliate of Borrower and, as such, will benefit by virtue of the financial accommodations extended to Borrower by the Secured Creditors and (b) by becoming a Grantor, will benefit from certain rights granted to the Grantors pursuant to the terms of the Loan Documents and the Note Documents;

NOW, THEREFORE, for and in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, each New Grantor hereby agrees as follows:

1.

In accordance with Section 26 of the Security Agreement, each New Grantor, by its signature below, becomes a “Grantor” under the Security Agreement with the same force and effect as if originally named therein as a “Grantor” and each New Grantor hereby (a) agrees to all of the terms and provisions of the Security Agreement applicable to it as a “Grantor” thereunder and (b) represents and warrants that the representations and warranties made by it as a “Grantor” thereunder are true and correct in all material respects (except that such materiality qualifier shall not be applicable to any representations and warranties that are already qualified or modified by materiality in the text thereof) on and as of the date hereof.  In furtherance of the foregoing, each New Grantor hereby unconditionally grants, assigns, and pledges to Collateral Agent, for the benefit of the Secured Creditors, to secure the Senior Indebtedness, a continuing security interest in and to all of such New Grantor’s right, title and interest in and to the Collateral.  Each reference to a “Grantor” in the Security Agreement shall be deemed to include each New Grantor.  The Security Agreement is incorporated herein by reference.   

2.

Schedule 1 , “Pledged Companies”, Schedule 2 , Name; Chief Executive Office; Tax Identification Numbers and Organizational Numbers, and Schedule 3 , “List of Uniform Commercial Code Filing Jurisdictions”. Schedule 1, Schedule 2 and Schedule 3, respectively, to the Security Agreement and shall be deemed a part thereof for all purposes of the Security Agreement.  

3.

Each New Grantor authorizes Collateral Agent at any time and from time to time to file, transmit or communicate, as applicable, financing statements and amendments thereto (i) describing the Collateral as “all personal property of debtor” or “all assets of debtor” or words of similar effect, (ii) describing the Collateral as being of equal or lesser scope or with greater detail than as in the foregoing subsection (i) or (iii) that contain any information required by part 5 of Article 9 of the Code for the sufficiency or filing office acceptance.  Each New Grantor also hereby ratifies any and all financing statements or amendments previously filed by Collateral Agent in any jurisdiction in connection with the Loan Documents and the Note Documents.

4.

Each New Grantor represents and warrants to Collateral Agent and the other Secured Creditors that this Joinder has been duly executed and delivered by such New Grantor and constitutes its legal, valid, and binding obligation, enforceable against it in accordance with its terms, except as enforceability thereof may be limited by bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other similar laws affecting creditors’ rights generally and general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).  








5.

This Joinder is a Collateral Document under the Intercreditor Agreement, a Loan Document under the Credit Agreement and a Transaction Document under the Note Agreement.  This Joinder may be executed in any number of counterparts and by different parties on separate counterparts, each of which, when executed and delivered, shall be deemed to be an original and all of which, when taken together, shall constitute but one and the same Joinder.  Delivery of an executed counterpart of this Joinder by telefacsimile or other electronic method of transmission shall be equally as effective as physical delivery of an original executed counterpart of this Joinder.  Any party delivering an executed counterpart of this Joinder by telefacsimile or other electronic method of transmission also shall deliver a physical original executed counterpart of this Joinder but the failure to deliver an original executed counterpart shall not affect the validity, enforceability, and binding effect of this Joinder.

6.

The Security Agreement, as supplemented hereby, shall remain in full force and effect.

7.

THIS JOINDER SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 25 OF THE SECURITY AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS .


[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]









IN WITNESS WHEREOF, the parties hereto have caused this Joinder to the Security Agreement to be executed and delivered as of the day and year first above written.


NEW GRANTORS :

[NAME OF NEW GRANTOR]

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

 

 

[NAME OF NEW GRANTOR]

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

 

 

COLLATERAL AGENT:

WELLS FARGO BANK, NATIONAL

 

ASSOCIATION

 

 

 

 

By:

 

 

 

Name:

 

 

Title:




ANNEX 2 TO SECURITY AGREEMENT

PLEDGED INTERESTS ADDENDUM


This Pledged Interests Addendum, dated as of _________ __, 20___ (this “ Pledged Interests Addendum ”), is delivered pursuant to Section 7 of the Security Agreement referred to below.  The undersigned hereby agrees that this Pledged Interests Addendum may be attached to that certain Security Agreement, dated as of December 3, 2014 (as amended, restated, supplemented, or otherwise modified from time to time, the “ Security Agreement ”), made by the undersigned, together with the other Grantors named therein, and WELLS FARGO BANK, NATIONAL ASSOCIATION , as Collateral Agent.  Capitalized terms used but not defined herein shall have the meaning ascribed to such terms in the Security Agreement or, if not defined therein, in the Credit Agreement, and this Pledged Interests Addendum shall be subject to the rules of construction set forth in Section 1(b) of the Security Agreement, which rules of construction are incorporated herein by this reference, mutatis mutandis .  

The undersigned hereby agrees that the additional interests listed on Schedule I shall be and become part of the Pledged Interests pledged by the undersigned to Collateral Agent in the Security Agreement and any pledged company set forth on Schedule I shall be and become a “Pledged Company” under the Security Agreement, each with the same force and effect as if originally named therein.

This Pledged interests Addendum is a Loan Document (under the Credit Agreement), a Transaction Document (under the Note Agreement) and an Additional Pari Passu Agreement.  Delivery of an executed counterpart of this Pledged Interests Addendum by telefacsimile or other electronic method of transmission shall be equally as effective as physical delivery of an original executed counterpart of this Pledged Interests Addendum.  If the undersigned delivers an executed counterpart of this Pledged Interests Addendum by telefacsimile or other electronic method of transmission, the undersigned shall also physically deliver an original executed counterpart of this Pledged Interests Addendum but the failure to deliver an original executed counterpart shall not affect the validity, enforceability and binding effect of this Pledged Interests Addendum.

The undersigned hereby certifies that the representations and warranties set forth in Section 6 of the Security Agreement of the undersigned are true and correct as to the Pledged Interests listed herein on and as of the date hereof.

THIS PLEDGED INTERESTS ADDENDUM SHALL BE SUBJECT TO THE PROVISIONS REGARDING CHOICE OF LAW AND VENUE, JURY TRIAL WAIVER, AND JUDICIAL REFERENCE SET FORTH IN SECTION 25 OF THE SECURITY AGREEMENT, AND SUCH PROVISIONS ARE INCORPORATED HEREIN BY THIS REFERENCE, MUTATIS MUTANDIS .

 

[SIGNATURE PAGE FOLLOWS]









IN WITNESS WHEREOF, the undersigned has caused this Pledged Interests Addendum to be executed and delivered as of the day and year first above written.


 

[___________________]

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:










SCHEDULE I
TO
PLEDGED INTERESTS ADDENDUM

Pledged Interests

Name of Grantor

Name of Pledged
Company

Number of
Shares/Units

Class of
Interests

Percentage
of Class
Owned

Certificate
Nos.

 

 

 

 

 

 

 

 

 

 

 

 





4




EXECUTION VERSION





C OPART , I NC .





$400,000,000



$100,000,000 4.07% Senior Notes, Series A, due December 3, 2024

$100,000,000 4.19% Senior Notes, Series B, due December 3, 2026

$100,000,000 4.25% Senior Notes, Series C, due December 3, 2027

$100,000,000 4.35% Senior Notes, Series D, due December 3, 2029



______________


N OTE P URCHASE A GREEMENT


______________



Dated as of December 3, 2014




T ABLE OF C ONTENTS

S ECTION

H EADING

P AGE

Section 1.

Authorization of Notes

1

Section 2.

Sale and Purchase of Notes; Subsidiary Guaranty; Security

1

 

Section 2.1.

Sale and Purchase of Notes

1

 

Section 2.2.

Subsidiary Guaranty

2

 

Section 2.3.

Security for the Notes

2

Section 3.

Closing

2

Section 4.

Conditions to Closing

2

 

Section 4.1.

Representations and Warranties

2

 

Section 4.2.

Performance; No Default

3

 

Section 4.3.

Compliance Certificates

3

 

Section 4.4.

Subsidiary Guaranty

3

 

Section 4.5.

Security Documents; Personal Property Collateral

4

 

Section 4.6.

Intercreditor Agreement

4

 

Section 4.7.

Credit Agreement

4

 

Section 4.8.

Opinions of Counsel

5

 

Section 4.9.

Purchase Permitted By Applicable Law, Etc.

5

 

Section 4.10.

Financial Condition/Solvency Certificate

5

 

Section 4.11.

Sale of Other Notes

5

 

Section 4.12.

Structuring Fee

5

 

Section 4.13.

Payment of Special Counsel Fees

5

 

Section 4.14.

Private Placement Number

6

 

Section 4.15.

Changes in Corporate Structure

6

 

Section 4.16.

Funding Instructions

6

 

Section 4.17.

Proceedings and Documents

6

Section 5.

Representations and Warranties of the Transaction Parties

6

 

Section 5.1.

Organization; Power; Qualification

6

 

Section 5.2.

Ownership

7

 

Section 5.3.

Authorization; Enforceability

7

 

Section 5.4.

Compliance of Agreement, Transaction Documents and
Issuance of Notes with Laws, Etc.

7




 

Section 5.5.

Compliance with Law; Governmental Approvals

7

 

Section 5.6.

Tax Returns and Payments

8

 

Section 5.7.

Intellectual Property Matters

8

 

Section 5.8.

Environmental Matters

9

 

Section 5.9.

Compliance with ERISA

9

 

Section 5.10.

Margin Stock

10

 

Section 5.11.

Government Regulation

11

 

Section 5.12.

Material Contracts

11

 

Section 5.13.

Employee Relations

11

 

Section 5.14.

Burdensome Provisions

11

 

Section 5.15.

Financial Statements

11

 

Section 5.16.

No Material Adverse Change

12

 

Section 5.17.

Solvency

12

 

Section 5.18.

Title to Properties

12

 

Section 5.19.

Litigation

12

 

Section 5.20.

Foreign Assets Control Regulations, Etc.

12

 

Section 5.21.

Absence of Defaults

13

 

Section 5.22.

Senior Indebtedness Status

13

 

Section 5.23.

Disclosure

13

 

Section 5.24.

Private Offering by the Company

14

 

Section 5.25.

Security Documents

14

 

Section 5.26.

Notes Rank Pari Passu

15

Section 6.

Representations of the Purchasers

15

 

Section 6.1.

Purchase for Investment, Etc.

15

 

Section 6.2.

Source of Funds

15

Section 7.

Information as to Company

17

 

Section 7.1.

Financial Statements and Budgets

17

 

Section 7.2.

Certificates; Other Reports

18

 

Section 7.3.

Notice of Litigation and Other Matters

19

 

Section 7.4.

Visits and Inspections

20

 

Section 8.

Payment and Prepayment of the Notes

21

 

Section 8.1.

Required Prepayments

21


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Section 8.2.

Optional Prepayments with Make-Whole Amount

21

 

Section 8.3.

Allocation of Partial Prepayments

21

 

Section 8.4.

Maturity; Surrender, Etc.

22

 

Section 8.5.

Purchase of Notes

22

 

Section 8.6.

Offer to Prepay Upon Asset Dispositions and Insurance and Condemnation Events

22

 

Section 8.7.

Prepayment Upon Change of Control

23

 

Section 8.8.

Make-Whole Amount

25

 

Section 8.9.

Payments Due on Non-Business Days

26

Section 9.

Affirmative Covenants

27

 

Section 9.1.

Compliance with Laws

27

 

Section 9.2.

Insurance

27

 

Section 9.3.

Maintenance of Properties

27

 

Section 9.4.

Payment of Taxes and Claims

27

 

Section 9.5.

Corporate Existence, Etc.

28

 

Section 9.6.

Books and Records

28

 

Section 9.7.

Additional Subsidiaries

28

 

Section 9.8.

Subsidiary Guarantors

30

 

Section 9.9.

Excess Leverage Fee

30

 

Section 9.10.

Most Favored Lender Status

31

 

Section 9.11.

Notes to Rank Pari Passu

32

 

Section 9.12.

Environmental Laws

32

 

Section 9.13.

Use of Proceeds

32

 

Section 9.14.

Further Assurances

32

 

Section 9.15.

Post-Closing Matters

33

Section 10.

Negative Covenants

33

 

Section 10.1.

Indebtedness

33

 

Section 10.2.

Liens

35

 

Section 10.3.

Investments

38

 

Section 10.4.

Fundamental Changes

40

 

Section 10.5.

Asset Dispositions

41

 

Section 10.6.

Restricted Payments

42

 

Section 10.7.

Transactions with Affiliates

44

 

Section 10.8.

Accounting Changes; Organizational Documents

44


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Section 10.9.

Payments and Modifications of Subordinated Indebtedness

45

 

Section 10.10.

No Further Negative Pledges; Restrictive Agreements

45

 

Section 10.11.

Nature of Business

47

 

Section 10.12.

[Reserved]

47

 

Section 10.13.

Sale Leasebacks

47

 

Section 10.14.

[Reserved]

47

 

Section 10.15.

Financial Covenants

47

 

Section 10.16.

[Reserved]

47

 

Section 10.17.

Disposal of Subsidiary Interests

47

 

Section 10.18.

Terrorism Sanctions Regulations

48

Section 11.

Events of Default

48

Section 12.

Remedies on Default, Etc.

51

 

Section 12.1.

Acceleration

51

 

Section 12.2.

Other Remedies

52

 

Section 12.3.

Rescission

52

 

Section 12.4.

No Waivers or Election of Remedies, Expenses, Etc.

52

Section 13.

Registration; Exchange; Substitution of Notes

52

 

Section 13.1.

Registration of Notes

52

 

Section 13.2.

Transfer and Exchange of Notes

53

 

Section 13.3.

Replacement of Notes

53

Section 14.

Payments on Notes

54

 

Section 14.1.

Place of Payment

54

 

Section 14.2.

Home Office Payment

54

Section 15.

Expenses, Etc.

54

 

Section 15.1.

Transaction Expenses

54

 

Section 15.2.

Survival

55

Section 16.

Survival of Representations and Warranties; Entire Agreement

55

Section 17.

Amendment and Waiver

56

 

Section 17.1.

Requirements

56

 

Section 17.2.

Solicitation of Holders of Notes

56

 

Section 17.3.

Binding Effect, Etc.

57

 

Section 17.4.

Notes Held by Company, Etc.

57


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Section 18.

Notices

57

Section 19.

Reproduction of Documents

58

Section 20.

Confidential Information

58

Section 21.

Substitution of Purchaser

59

Section 22.

Miscellaneous

60

 

Section 22.1.

Successors and Assigns

60

 

Section 22.2.

Accounting Terms

60

 

Section 22.3.

Severability

61

 

Section 22.4.

Construction, Etc.

61

 

Section 22.5.

Counterparts

61

 

Section 22.6.

Governing Law

61

 

Section 22.7.

Jurisdiction and Process; Waiver of Jury Trial

61


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A TTACHMENTS TO N OTE P URCHASE A GREEMENT:


S CHEDULE A

—

D EFINED T ERMS

 

 

 

S CHEDULE 1( a)

—

F ORM OF 4.07% S ENIOR N OTE, S ERIES A, D UE D ECEMBER 3, 2024

 

 

 

S CHEDULE 1( b)

—

F ORM OF 4.19% S ENIOR N OTE, S ERIES B, D UE D ECEMBER 3, 2026

 

 

 

S CHEDULE 1( c)

—

F ORM OF 4.25% S ENIOR N OTE, S ERIES C, D UE D ECEMBER 3, 2027

 

 

 

S CHEDULE 1( d)

—

F ORM OF 4.35% S ENIOR N OTE, S ERIES D, D UE D ECEMBER 3, 2029

 

 

 

S CHEDULE 2.2

—

F ORM OF S UBSIDIARY G UARANTY

 

 

 

S CHEDULE 4.5

—

F ORM OF I NTERCREDITOR A GREEMENT

 

 

 

S CHEDULE 4.8( a)

—

F ORM OF O PINION OF S PECIAL C OUNSEL FOR THE C OMPANY

 

 

 

S CHEDULE 4.8( b)

—

F ORM OF O PINION OF S PECIAL C ONNECTICUT C OUNSEL FOR THE C OMPANY

 

 

 

S CHEDULE 4.8( c)

—

F ORM OF O PINION OF S PECIAL C OUNSEL FOR THE P URCHASERS

 

 

 

S CHEDULE 7.2( a)

—

F ORM OF O FFICER’S C OMPLIANCE C ERTIFICATE

 

 

 

S CHEDULE 9.15

—

P OST- C LOSING M ATTERS

 

 

 

S CHEDULE B

—

I NFORMATION R ELATING TO P URCHASERS





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C OPART , I NC .

14185 Dallas Parkway
Dallas, TX 75254



$100,000,000 4.07% Senior Notes, Series A, due December 3, 2024

$100,000,000 4.19% Senior Notes, Series B, due December 3, 2026

$100,000,000 4.25% Senior Notes, Series C, due December 3, 2027

$100,000,000 4.35% Senior Notes, Series D, due December 3, 2029



December 3, 2014


T O E ACH OF THE P URCHASERS L ISTED IN

S CHEDULE B H ERETO :

Ladies and Gentlemen:

Copart, Inc., a Delaware corporation (the “Company” ), agrees with each of the Purchasers as follows:

SECTION 1.

A UTHORIZATION OF N OTES.

The Company will authorize the issue and sale of $400,000,000 aggregate principal amount of its senior secured notes consisting of (a) $100,000,000 aggregate principal amount of its 4.07% Senior Notes, Series A, due December 3, 2024 (the “Series A Notes” ), (b) $100,000,000 aggregate principal amount of its 4.19% Senior Notes, Series B, due December 3, 2026 (the “Series B Notes” ), (c) $100,000,000 aggregate principal amount of its 4.25% Senior Notes, Series C, due December 3, 2027 (the “Series C Notes” ) and (d) $100,000,000 aggregate principal amount of its 4.35% Senior Notes, Series D, due December 3, 2029 (the “Series D Notes” ; the Series A Notes, the Series B Notes, the Series C Notes and the Series D Notes, as amended, restated or otherwise modified from time to time pursuant to Section 17 and including any such notes issued in substitution therefor pursuant to Section 13, collectively, the “Notes” ).  The Notes shall be substantially in the form set out in Schedule 1(a), Schedule 1(b), Schedule 1(c) and Schedule 1(d), respectively.  Certain capitalized and other terms used in this Agreement are defined in Schedule A.  References to a “Schedule” are references to a Schedule attached to this Agreement unless otherwise specified.  References to a “Section” are references to a Section of this Agreement unless otherwise specified.

SECTION 2.

S ALE AND P URCHASE OF N OTES; S UBSIDIARY G UARANTY; S ECURITY.

Section 2.1.

Sale and Purchase of Notes.   Subject to the terms and conditions of this Agreement, the Company will issue and sell to each Purchaser and each Purchaser will purchase from the Company, at the Closing provided for in Section 3, Notes in the principal amount specified opposite such Purchaser’s name in Schedule B at the purchase price of 100% of the



principal amount thereof.  The Purchasers’ obligations hereunder are several and not joint obligations and no Purchaser shall have any liability to any Person for the performance or non-performance of any obligation by any other Purchaser hereunder.

Section 2.2.

Subsidiary Guaranty.   The payment by the Company of all amounts due with respect to the Notes and the performance by the Company of its obligations under this Agreement will be absolutely and unconditionally guaranteed by the Subsidiary Guarantors pursuant to the Subsidiary Guaranty Agreement dated as of December 3, 2014, which shall be substantially in the form of Schedule 2.2 attached hereto (the “Subsidiary Guaranty” ).  

Section 2.3.

Security for the Notes.   The obligations of the Company hereunder and under the Notes and of the Subsidiary Guarantors under the Subsidiary Guaranty are secured pursuant to the Security Documents.  

SECTION 3.

C LOSING .

The sale and purchase of the Notes to be purchased by each Purchaser shall occur at the offices of Schiff Hardin LLP, 233 S. Wacker Drive, Suite 6600, Chicago, IL 60606, at 11:00 a.m., New York, New York time, at a closing (the “Closing” ) on December 3, 2014 or on such other Business Day thereafter as may be agreed upon by the Company and the Purchasers (the “Closing Date” ).  At the Closing the Company will deliver to each Purchaser the Notes of each series to be purchased by such Purchaser in the form of a single Note of such series (or such greater number of Notes of such series in denominations of at least $100,000 as such Purchaser may request) dated the date of the Closing and registered in such Purchaser’s name (or in the name of its nominee), against delivery by such Purchaser to the Company or its order of immediately available funds in the amount of the purchase price therefor by wire transfer of immediately available funds to the account of the Company set forth in the funding instructions delivered by the Company pursuant to Section 4.16.  If at the Closing the Company shall fail to tender such Notes to any Purchaser as provided above in this Section 3, or any of the conditions specified in Section 4 shall not have been fulfilled to such Purchaser’s satisfaction, such Purchaser shall, at its election, be relieved of all further obligations under this Agreement, without thereby waiving any rights such Purchaser may have by reason of any of the conditions specified in Section 4 not having been fulfilled to such Purchaser’s satisfaction or such failure by the Company to tender such Notes.

SECTION 4.

C ONDITIONS TO C LOSING .

Each Purchaser’s obligation to purchase and pay for the Notes to be sold to such Purchaser at the Closing is subject to the fulfillment to such Purchaser’s satisfaction, prior to or at the Closing, of the following conditions:

Section 4.1.

Representations and Warranties .  

(a)

Representations and Warranties of the Company.  The representations and warranties of the Company in this Agreement and each other Transaction Document to which it is a party shall be correct when made and at the Closing.



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(b)

Representations and Warranties of the Subsidiary Guarantors.  The representations and warranties of the Subsidiary Guarantors in the Subsidiary Guaranty and in each other Transaction Document to which it is a party shall be correct when made and at the Closing.

Section 4.2.

Performance; No Default .   The Company and each Subsidiary Guarantor shall have performed and complied with all agreements and conditions contained in this Agreement, the Subsidiary Guaranty and each other Transaction Document required to be performed or complied with by it prior to or at the Closing.  Before and after giving effect to the issue and sale of the Notes (and the application of the proceeds thereof as contemplated by Section 9.13), no Default or Event of Default shall have occurred and be continuing.  

Section 4.3.

Compliance Certificates .

(a)

Officer’s Certificate of the Company.  The Company shall have delivered to such Purchaser an Officer’s Certificate, dated the date of the Closing, certifying that the conditions specified in Sections 4.1, 4.2 and 4.15 have been fulfilled.

(b)

Secretary’s Certificate of the Company.  The Company shall have delivered to such Purchaser a certificate of its Secretary or Assistant Secretary, dated the date of the Closing, certifying as to (1) the resolutions attached thereto and other corporate proceedings relating to the authorization, execution and delivery of the Notes, this Agreement and the other Transaction Documents to which it is a party and (2) the Company’s organizational documents as then in effect.

(c)

Officer’s Certificates of the Subsidiary Guarantors.   Each Subsidiary Guarantor shall have delivered to such Purchaser an Officer’s Certificate, dated the date of the Closing, certifying that the conditions specified in Sections 4.1(b), 4.2 and 4.15 have been fulfilled.

(d)

Secretary’s Certificates of the Subsidiary Guarantors.   Each Subsidiary Guarantor shall have delivered to such Purchaser a certificate of its Secretary or an Assistant Secretary, dated the date of such Closing, certifying as to (1) the resolutions attached thereto and other corporate or other proceedings relating to the authorization, execution and delivery of the Subsidiary Guaranty and the other Transaction Documents to which it is a party and (2) such Subsidiary Guarantor’s organizational documents as then in effect.

(e)

Good Standing Certificates.   The Company shall have delivered to such Purchaser certificates as of a recent date of the good standing of each Transaction Party under the laws of its jurisdiction of incorporation, organization or formation (or equivalent), as applicable.

Section 4.4.

Subsidiary Guaranty.  The Subsidiary Guaranty shall have been duly authorized, executed and delivered by each Subsidiary of the Company that would be required to deliver a Subsidiary Guaranty pursuant to Section 9.7 or 9.8 and shall be in full force and effect and such Purchaser shall have received a duly executed copy thereof.  



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Section 4.5.

Security Documents; Personal Property Collateral

(a)

Each Security Document specified by the Purchasers to be delivered on the Closing Date shall have been duly authorized, executed and delivered by the parties thereto and shall be in full force and effect and such Purchaser shall have received a duly executed copy thereof.  

(b)

Such Purchaser shall have received all information necessary file UCC-1 financing statements in the jurisdictions of incorporation or formation of each Transaction Party.

(c)

Such Purchaser shall have received evidence that the Collateral Agent shall have received original stock certificates or other certificates evidencing the certificated Equity Interests pledged pursuant to the Security Documents, together with an undated stock power for each such certificate duly executed in blank by the registered owner thereof.

(d)

Such Purchaser shall have received the results of a Lien search (including a search as to judgments, pending litigation, bankruptcy, tax and intellectual property matters), in form and substance reasonably satisfactory to such Purchaser, made against the Transaction Parties under the Uniform Commercial Code (or applicable judicial docket) as in effect in each jurisdiction in which filings or recordations under the Uniform Commercial Code should be made to evidence or perfect security interests in all assets of such Transaction Party, indicating among other things that the assets of each such Transaction Party are free and clear of any Lien (except for Permitted Liens).

(e)

Such Purchaser shall have received, in each case in form and substance reasonably satisfactory to such Purchaser, evidence of property, business interruption and liability insurance covering each Transaction Party (with appropriate endorsements naming the Collateral Agent as lender’s loss payee on all policies for property hazard insurance and as additional insured on all policies for liability insurance).

Section 4.6.

Intercreditor Agreement.  The Bank Agent, each lender party to the Credit Agreement, each Purchaser and the Collateral Agent shall have executed and delivered, and each Transaction Party shall have acknowledged, that certain Intercreditor and Collateral Agency Agreement dated as of December 3, 2014 (as the same may be amended, supplemented, replaced, restated or otherwise modified from time to time, the “Intercreditor Agreement” ) substantially in the form of Schedule 4.5.

Section 4.7.

Credit Agreement.  The Credit Agreement providing for a $300,000,000 revolving credit facility and a $300,000,000 term loan facility to the Company and having other terms and conditions satisfactory to such Purchaser, shall have been duly executed and delivered by the Company, the Bank Agent and the lenders party to the Credit Agreement, and shall be in full force and effect.  All conditions precedent to the making of the term loans under the Credit Agreement shall have been satisfied and prior to, or concurrently with, the purchase of the Notes, the Company shall have received the proceeds of the term loan under the Credit Agreement in accordance with the terms thereof.  All instruments, documents and agreements related to the



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closing of the transactions under the Credit Agreement shall be in form and substance reasonably satisfactory to such Purchaser and such Purchaser shall have received a copy of the Credit Agreement certified by an Officer’s Certificate of the Company, dated the date of the Closing, as true, correct and complete.

Section 4.8.

Opinions of Counsel .  Such Purchaser shall have received opinions in form and substance reasonably satisfactory to such Purchaser, dated the date of the Closing (a) from Wilson Sonsini Goodrich & Rosati, special counsel for the Company, covering the matters set forth in Schedule 4.8(a) (and the Company hereby instructs its counsel to deliver such opinion to the Purchasers), (b) from Shipman, Shaiken & Schwefel, LLC, special Connecticut counsel for the Company, covering the matters set forth in Schedule 4.8(b) (and the Company hereby instructs its counsel to deliver such opinion to the Purchasers) and (c) from Schiff Hardin LLP, the Purchasers’ special counsel in connection with such transactions, substantially in the form set forth in Schedule 4.8(c) and covering such other matters incident to such transactions as such Purchaser may reasonably request.

Section 4.9.

Purchase Permitted By Applicable Law, Etc .  On the date of the Closing such Purchaser’s purchase of Notes shall (a) be permitted by the laws and regulations of each jurisdiction to which such Purchaser is subject, without recourse to provisions (such as section 1405(a)(8) of the New York Insurance Law) permitting limited investments by insurance companies without restriction as to the character of the particular investment, (b) not violate any applicable law or regulation (including, without limitation, Regulation T, U or X of the Board of Governors of the Federal Reserve System) and (c) not subject such Purchaser to any tax, penalty or liability under or pursuant to any applicable law or regulation.  If requested by such Purchaser, such Purchaser shall have received an Officer’s Certificate certifying as to such matters of fact as such Purchaser may reasonably specify to enable such Purchaser to determine whether such purchase is so permitted.

Section 4.10.

Financial Condition/Solvency Certificate.  The Company shall have delivered to such Purchaser a certificate, in form and substance satisfactory to such Purchaser, and certified as accurate by the chief financial officer of the Company, that (a) after giving effect to the Transactions, the Company and its Subsidiaries, taken as a whole, are Solvent and (b) attached thereto are calculations evidencing compliance on a Pro Forma Basis after giving effect to the Transactions with the covenants contained in Section 10.15.

Section 4.11.

Sale of Other Notes .  Contemporaneously with the Closing the Company shall sell to each other Purchaser and each other Purchaser shall purchase the Notes to be purchased by it at the Closing as specified in Schedule B.

Section 4.12.

Structuring Fee.   The Company shall have paid to each Purchaser (or its designee), a structuring fee equal to 7.50 basis points of the aggregate principal amount of all Notes to be purchased by such Purchaser on the Closing Date.  The aggregate structuring fees payable pursuant to this Section 4.12 to all Purchasers shall equal $300,000.

Section 4.13.

Payment of Special Counsel Fees .  Without limiting Section 15.1, the Company shall have paid on or before the Closing the fees, charges and disbursements of the



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Purchasers’ special counsel referred to in Section 4.8 to the extent reflected in a statement of such counsel rendered to the Company at least one Business Day prior to the Closing.

Section 4.14.

Private Placement Number .  A Private Placement Number issued by Standard & Poor’s CUSIP Service Bureau (in cooperation with the SVO) shall have been obtained for each series of the Notes.

Section 4.15.

Changes in Corporate Structure .  Neither the Company nor any Subsidiary Guarantor shall have changed its jurisdiction of incorporation or organization, as applicable, or been a party to any merger or consolidation or succeeded to all or any substantial part of the liabilities of any other entity, at any time following the date of the most recent financial statements referred to in Section 5.15.  

Section 4.16.

Funding Instructions .  At least three Business Days prior to the date of the Closing, each Purchaser shall have received written instructions signed by a Responsible Officer on letterhead of the Company directing the manner of payment of funds for the purchase of the Notes and setting forth (a) the name and address of the transferee bank, (b) such transferee bank’s ABA number and (c) the account name and number into which the purchase price for the Notes is to be deposited.  

Section 4.17.

Proceedings and Documents .  All corporate and other proceedings in connection with the transactions contemplated by this Agreement and all documents and instruments incident to such transactions shall be satisfactory to such Purchaser and its special counsel, and such Purchaser and its special counsel shall have received all such counterpart originals or certified or other copies of such documents as such Purchaser or such special counsel may reasonably request.

SECTION 5.

R EPRESENTATIONS AND W ARRANTIES OF THE T RANSACTION P ARTIES .

To induce the Purchasers to enter into this Agreement and to induce the Purchasers to purchase the Notes, the Transaction Parties hereby represent and warrant to each Purchaser both before and after giving effect to the transactions contemplated hereunder, which representations and warranties shall be deemed made on the Closing Date, that

Section 5.1.

Organization; Power; Qualification.  Each Transaction Party and each Subsidiary thereof (a) is duly organized or incorporated, validly existing and in good standing (or in the case of any Foreign Subsidiary, the equivalent status, if any, in the applicable foreign jurisdiction) under the laws of the jurisdiction of its incorporation or formation, (b) has the power and authority to own its Properties and to carry on its business as now being and hereafter proposed to be conducted and (c) is duly qualified and authorized to do business in each jurisdiction in which the character of its Properties or the nature of its business requires such qualification and authorization (to the extent applicable in the case of Foreign Subsidiaries) except in jurisdictions where the failure to be so qualified or in good standing could not reasonably be expected to result in a Material Adverse Effect.  Each Transaction Party and each Subsidiary as of the Closing Date, and the jurisdictions in which each Transaction Party and each Subsidiary thereof are organized and qualified to do business as of the Closing Date are listed on Schedule 5.1 to the Disclosure Letter.  



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Section 5.2.

Ownership.  As of the Closing Date, the capitalization of each Transaction Party (other than the Company) consists of the number of shares, authorized, issued and outstanding, of such classes and series, with or without par value, described on Schedule 5.2 to the Disclosure Letter.  As of the Closing Date, all outstanding shares of each Subsidiary have been duly authorized and validly issued and, to the extent applicable, are fully paid and nonassessable and not subject to any preemptive or similar rights, except as described in Schedule 5.2 to the Disclosure Letter.  As of the Closing Date, there are no outstanding stock purchase warrants, subscriptions, options, securities, instruments or other rights of any type or nature whatsoever, which are convertible into, exchangeable for or otherwise provide for or require the issuance of Equity Interests of any Subsidiary, except as described on Schedule 5.2 to the Disclosure Letter.

Section 5.3.

Authorization; Enforceability.  Each Transaction Party has the right, power and authority and has taken all necessary corporate and other action to authorize the execution, delivery and performance of this Agreement and each of the other Transaction Documents to which it is a party in accordance with their respective terms.  This Agreement and each of the other Transaction Documents have been duly executed and delivered by the duly authorized officers of each Transaction Party that is a party thereto, and each such document constitutes the legal, valid and binding obligation of each Transaction Party that is a party thereto, enforceable in accordance with its terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar state or federal Debtor Relief Laws from time to time in effect which affect the enforcement of creditors’ rights in general and the availability of equitable remedies (regardless of whether enforcement is sought in equity or at law).

Section 5.4.

Compliance of Agreement, Transaction Documents and Issuance of Notes with Laws, Etc.  The execution, delivery and performance by each Transaction Party of the Transaction Documents to which each such Person is a party, in accordance with their respective terms, the issuance and sale of the Notes hereunder and the transactions contemplated hereby or thereby do not and will not, by the passage of time, the giving of notice or otherwise, (a) require any Governmental Approval on the part of any Transaction Party or violate any Applicable Law relating to any Transaction Party or any Subsidiary thereof, (b) conflict with, result in a breach of or constitute a default under the articles of incorporation, bylaws or other organizational documents of any Transaction Party, (c) conflict with, result in a breach of or constitute a default under any indenture, agreement or other instrument to which such Person is a party or by which any of its properties may be bound or any Governmental Approval relating to such Person, (d) result in or require the creation or imposition of any Lien upon or with respect to any property now owned or hereafter acquired by such Person other than Permitted Liens or (e) require any consent or authorization of, filing with, or other act in respect of, an arbitrator or Governmental Authority and no consent of any other Person is required in connection with the execution, delivery, performance, validity or enforceability of this Agreement other than consents or filings under the UCC.

Section 5.5.

Compliance with Law; Governmental Approvals.  Each Transaction Party and each Subsidiary thereof (a) has all Governmental Approvals required by any Applicable Law for it to conduct its business, each of which is in full force and effect, (b) is in compliance with each Governmental Approval applicable to it and in compliance with all other



-7-



Applicable Laws relating to it or any of its respective properties and (c) has timely filed all material reports, documents and other materials required to be filed by it under all Applicable Laws with any Governmental Authority and has retained all material records and documents required to be retained by it under Applicable Law except in each case (a), (b) or (c) where the failure to have, comply, file or retain could not reasonably be expected to have a Material Adverse Effect.

Section 5.6.

Tax Returns and Payments.  Each Transaction Party and each Subsidiary thereof has duly filed or caused to be filed all federal and all other material state, local and other tax returns required by Applicable Law to be filed, and has paid, or made adequate provision for the payment of, all federal and all other material state, local and other taxes, assessments and governmental charges or levies upon it and its property, income, profits and assets which are due and payable (other than any amount the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided for on the books of the relevant Transaction Party).  Such returns accurately reflect in all material respects all liability for taxes of any Transaction Party or any Subsidiary thereof for the periods covered thereby.  As of the Closing Date, except as set forth on Schedule 5.6 to the Disclosure Letter, there is no ongoing audit or examination or, to its knowledge, other investigation by any Governmental Authority of the tax liability of any Transaction Party or any Subsidiary thereof.  No Governmental Authority has asserted any Lien or other claim against any Transaction Party or any Subsidiary thereof with respect to unpaid taxes which has not been discharged or resolved (other than (a) any amount the validity of which is currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided for on the books of the relevant Transaction Party or that could not reasonably be expected to have a Material Adverse Effect and (b) Permitted Liens).  The charges, accruals and reserves on the books of each Transaction Party and each Subsidiary thereof in respect of federal, state, local and other taxes for all Fiscal Years and portions thereof since the organization of any Transaction Party or any Subsidiary thereof are in the judgment of the Company adequate, and the Company does not anticipate any additional taxes or assessments for any of such years that could reasonably be expected to have a Material Adverse Effect.

Section 5.7.

Intellectual Property Matters.  Each Transaction Party and each Subsidiary thereof owns or possesses rights to use all material franchises, licenses, copyrights, copyright applications, patents, patent rights or licenses, patent applications, trademarks, trademark rights, service mark, service mark rights, trade names, trade name rights, copyrights and other rights with respect to the foregoing which are reasonably necessary to conduct its business except where the failure to own or possess such rights could not reasonably be expected to have a Material Adverse Effect.  No event has occurred which permits, or after notice or lapse of time or both would permit, the revocation or termination of any such rights, and no Transaction Party nor any Subsidiary thereof is liable to any Person for infringement under Applicable Law with respect to any such rights as a result of its business operations, in each case where such revocation, termination or liability could reasonably be expected to have a Material Adverse Effect.



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Section 5.8.

Environmental Matters.

(a)

None of the Transaction Parties and nor any Subsidiary thereof has released any Hazardous Materials in amounts or concentrations which constitute or constituted a violation of applicable Environmental Laws which could reasonably be expected to have a Material Adverse Effect;

(b)

To its knowledge, each Transaction Party and each Subsidiary thereof and all their operations are in compliance, and have been in compliance, with all applicable Environmental Laws except for such noncompliance or violations which could not reasonably be expected to have a Material Adverse Effect, and none of the Transaction Parties nor any Subsidiary thereto has actual knowledge of any contamination at, under or about such owned or leased properties which would reasonably be expected to materially interfere with their continued operations;

(c)

No Transaction Party nor any Subsidiary thereof has received any written notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters, Hazardous Materials, or compliance with Environmental Laws that, if adversely determined, could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, nor does any Transaction Party or any Subsidiary thereof have actual knowledge that any such written notice will be received or is being threatened;

(d)

To its knowledge, none of the Transaction Parties nor any Subsidiary has transported or disposed of any Hazardous Materials to or from the properties owned, leased or operated by any Transaction Party or any Subsidiary thereof in violation of, or in a manner or to a location which could reasonably be expected to give rise to liability under, Environmental Laws which could reasonably be expected to have a Material Adverse Effect, nor have any Hazardous Materials been generated, treated, stored or disposed of at, on or under any of such properties in violation of, or in a manner that could give rise to liability under, any applicable Environmental Laws which could reasonably be expected to have a Material Adverse Effect; and

(e)

No judicial proceedings or governmental or administrative action is pending, or, to the knowledge of the Company, threatened, under any Environmental Law to which any Transaction Party or any Subsidiary thereof is or will be named as a potentially responsible party, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, outstanding under any applicable Environmental Law with respect to any Transaction Party, any Subsidiary thereof, that could reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

Section 5.9.

Compliance with ERISA .  

(a)

The Company and each ERISA Affiliate have operated and administered each Plan in compliance with all applicable laws except for such instances of noncompliance as have not resulted in and could not, individually or in the aggregate,



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reasonably be expected to result in a Material Adverse Effect.  Neither the Company nor any ERISA Affiliate has incurred any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans (as defined in section 3 of ERISA), and no event, transaction or condition has occurred or exists that could, individually or in the aggregate, reasonably be expected to result in the incurrence of any such liability by the Company or any ERISA Affiliate, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate, in either case pursuant to Title I or IV of ERISA or to section 430(k) of the Code or to any such penalty or excise tax provisions under the Code or federal law or section 4068 of ERISA or by the granting of a security interest in connection with the amendment of a Plan, in all cases other than such liabilities or Liens as would not individually or in the aggregate result in a Material Adverse Effect.

(b)

The present value of the aggregate benefit liabilities under each of the Plans (other than Multiemployer Plans), determined as of the end of such Plan’s most recently ended plan year on the basis of the actuarial assumptions specified for funding purposes in such Plan’s most recent actuarial valuation report, did not exceed the aggregate current value of the assets of such Plan allocable to such benefit liabilities.  The term “benefit liabilities” has the meaning specified in section 4001 of ERISA and the terms “current value” and “present value” have the meaning specified in section 3 of ERISA.

(c)

The Company and its ERISA Affiliates have not incurred withdrawal liabilities (and are not subject to contingent withdrawal liabilities) under section 4201 or 4204 of ERISA in respect of Multiemployer Plans that individually or in the aggregate could result in a Material Adverse Effect.

(d)

The expected postretirement benefit obligation (determined as of the last day of the Company’s most recently ended fiscal year in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 715-60, without regard to liabilities attributable to continuation coverage mandated by section 4980B of the Code) of the Company and its Subsidiaries is not Material.

(e)

The execution and delivery of this Agreement and the issuance and sale of the Notes hereunder will not involve any transaction that is subject to the prohibitions of section 406 of ERISA or in connection with which a tax could be imposed pursuant to section 4975(c)(1)(A)-(D) of the Code.  The representation by the Company to each Purchaser in the first sentence of this Section 5.9(e) is made in reliance upon and subject to the accuracy of such Purchaser’s representation in Section 6.2 as to the sources of the funds to be used to pay the purchase price of the Notes to be purchased by such Purchaser.

Section 5.10.

Margin Stock.  No Transaction Party nor any Subsidiary thereof is engaged principally or as one of its activities in the business of extending credit for the purpose of “purchasing” or “carrying” any “margin stock” (as each such term is defined or used, directly or indirectly, in Regulation U of the Board of Governors of the Federal Reserve System).  No part of the proceeds of any of the Notes will be used for purchasing or carrying margin stock or



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for any purpose which violates, or which would be inconsistent with, the provisions of Regulation T, U or X of such Board of Governors.  Following the application of the proceeds of the Notes, not more than 25% of the value of the assets (either of the Company only or of the Company and its Subsidiaries on a Consolidated basis) subject to the provisions of Section 10.2 or Section 10.5 or subject to any restriction contained in any agreement or instrument between the Company and any holder of Notes or any Affiliate of any holder of Notes relating to Indebtedness in excess of the Threshold Amount will be “margin stock”.

Section 5.11.

Government Regulation.  No Transaction Party nor any Subsidiary thereof is required to register as an “investment company” within the meaning of the Investment Company Act of 1940 and no Transaction Party nor any Subsidiary thereof is, or after giving effect to the issuance and sale of the Notes will be, subject to regulation under the Interstate Commerce Act, or any other Applicable Law which limits its ability to incur or consummate the transactions contemplated hereby.

Section 5.12.

Material Contracts.  The Company’s filings with the SEC set forth a complete and accurate list of all Material Contracts of each Transaction Party and each Subsidiary thereof in effect as of the Closing Date.  Other than as set forth in Schedule 5.12 to the Disclosure Letter, as of the Closing Date, each such Material Contract is, and after giving effect to the consummation of the transactions contemplated by the Transaction Documents will be, in full force and effect in accordance with the terms thereof.  As of the Closing Date, no Transaction Party nor any Subsidiary thereof (nor, to its knowledge, any other party thereto) is in breach of or in default under any Material Contract in any material respect.

Section 5.13.

Employee Relations.  As of the Closing Date, no Transaction Party or any Subsidiary thereof is party to any collective bargaining agreement, nor has any labor union been recognized as the representative of its employees except as set forth on Schedule 5.13 to the Disclosure Letter.  The Company knows of no pending or threatened in writing strikes, work stoppage or other collective labor disputes involving its employees or those of its Subsidiaries that, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect.

Section 5.14.

Burdensome Provisions.  The Transaction Parties and their respective Subsidiaries do not presently anticipate that future expenditures needed to meet the provisions of any statutes, orders, rules or regulations of a Governmental Authority will be so burdensome as to have a Material Adverse Effect.  No Subsidiary is party to any agreement or instrument or otherwise subject to any restriction or encumbrance that restricts or limits its ability to make dividend payments or other distributions in respect of its Equity Interests to the Company or any Subsidiary or to transfer any of its assets or properties to the Company or any other Subsidiary in each case other than existing under or by reason of the Transaction Documents or Applicable Law or as permitted by Section 10.10.

Section 5.15.

Financial Statements.  The audited consolidated financial statements of the Company and its Subsidiaries for the fiscal year ended July 31, 2014 delivered to the Purchasers prior to the Closing Date fairly present in all material respects on a Consolidated basis the assets, liabilities and financial position of the Company and its Subsidiaries as at such dates, and the results of the operations and changes of financial position for the periods then



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ended.  All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP.  Such financial statements show all material indebtedness and other material liabilities, direct or contingent, of the Company and its Subsidiaries as of the date thereof, including material liabilities for taxes, material commitments, and Indebtedness, in each case, to the extent required to be disclosed in financial statements prepared in accordance with GAAP.  The pro forma financial statements and projections delivered by the Company to the Purchasers prior to the Closing Date were prepared in good faith on the basis of the assumptions stated therein, which assumptions are believed to be reasonable in light of then existing conditions except that such financial projections and statements shall be subject to normal year end closing and audit adjustments (it being recognized by the Purchasers that projections are not to be viewed as facts and that the actual results during the period or periods covered by such projections may vary from such projections).

Section 5.16.

No Material Adverse Change.  Since July 31, 2014, there has been no material adverse change in the properties, business, operations, or condition (financial or otherwise) of the Company and its Subsidiaries, taken as a whole, and no event has occurred or condition arisen, either individually or in the aggregate, that could reasonably be expected to have a Material Adverse Effect.

Section 5.17.

Solvency.  The Company and its Subsidiaries, on a Consolidated basis, are Solvent.

Section 5.18.

Title to Properties.  Each Transaction Party and each Subsidiary thereof has such title to the real property owned or leased by it as is necessary or desirable to the conduct of its business and valid and legal title to all of its personal property and assets, except those which have been disposed of by the Transaction Parties and their Subsidiaries subsequent to such date which dispositions have been in the ordinary course of business or as otherwise expressly permitted hereunder or where the failure to do so could not reasonably be expected to have a Material Adverse Effect.

Section 5.19.

Litigation.  There are no actions, suits or proceedings pending nor, to its knowledge, threatened in writing against or in any other way relating adversely to or affecting any Transaction Party or any Subsidiary thereof or any of their respective properties in any court or before any arbitrator of any kind or before or by any Governmental Authority that could reasonably be expected to have a Material Adverse Effect.

Section 5.20.

Foreign Assets Control Regulations, Etc .  

(a)

Neither the Company nor any Controlled Entity (i) is a Blocked Person, (ii) has been notified that its name appears or may in the future appear on a State Sanctions List or (iii) is a target of sanctions that have been imposed by the United Nations or the European Union.

(b)

Neither the Company nor any Controlled Entity (i) has violated, been found in violation of, or been charged or convicted under, any applicable U.S. Economic Sanctions Laws, Anti-Money Laundering Laws or Anti-Corruption Laws or (ii) to the Company’s knowledge, is under investigation by any Governmental Authority for



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possible violation of any U.S. Economic Sanctions Laws, Anti-Money Laundering Laws or Anti-Corruption Laws.

(c)

No part of the proceeds from the sale of the Notes hereunder:

(1)

constitutes or will constitute funds obtained on behalf of any Blocked Person or will otherwise be used by the Company or any Controlled Entity, directly or indirectly, (A) in connection with any investment in, or any transactions or dealings with, any Blocked Person, (B) for any purpose that would cause any Purchaser to be in violation of any U.S. Economic Sanctions Laws or (C) otherwise in violation of any U.S. Economic Sanctions Laws;

(2)

will be used, directly or indirectly, in violation of, or cause any Purchaser to be in violation of, any applicable Anti-Money Laundering Laws; or

(3)

will be used, directly or indirectly, for the purpose of making any improper payments, including bribes, to any Governmental Official or commercial counterparty in order to obtain, retain or direct business or obtain any improper advantage, in each case which would be in violation of, or cause any Purchaser to be in violation of, any applicable Anti-Corruption Laws.

(d)

The Company has established procedures and controls which it reasonably believes are adequate (and otherwise comply with applicable law) to ensure that the Company and each Controlled Entity is and will continue to be in compliance with all applicable U.S. Economic Sanctions Laws, Anti-Money Laundering Laws and Anti-Corruption Laws.  

Section 5.21.

Absence of Defaults.  No event has occurred or is continuing (a) which constitutes a Default or an Event of Default, or (b) which constitutes, or which with the passage of time or giving of notice or both would constitute, a default or event of default by any Transaction Party or any Subsidiary thereof under (i) any Material Contract or (ii) any judgment, decree or order to which any Transaction Party or any Subsidiary thereof is a party or by which any Transaction Party or any Subsidiary thereof or any of their respective properties may be bound or which would require any Transaction Party or any Subsidiary thereof to make any payment thereunder prior to the scheduled maturity date therefor that, in any case under this clause (b), could, either individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 5.22.

Senior Indebtedness Status.  The Obligations of each Transaction Party under this Agreement and each of the other Transaction Documents rank and shall continue to rank at least senior in priority of payment to all Subordinated Indebtedness and effectively senior to the extent of the value of the Collateral to all unsubordinated unsecured Indebtedness of each such Person and, to the extent applicable, is designated as “Senior Indebtedness” under all instruments and documents, now or in the future, relating to all Subordinated Indebtedness.

Section 5.23.

Disclosure.  The Company and/or its Subsidiaries have disclosed to each Purchaser all agreements, instruments and corporate or other restrictions to which any Transaction Party and any Subsidiary thereof are subject, and all other matters known to them,



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that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.  No financial statement, material report, material certificate or other material information furnished (in writing) by or on behalf of any Transaction Party or any Subsidiary thereof to the any Purchaser in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished), taken together as a whole and together with the Company’s filings with the SEC, contains any untrue statement of a material fact or omits to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that, with respect to projected financial information, pro forma financial information, estimated financial information and other projected or estimated information, such information was prepared in good faith based upon assumptions believed to be reasonable at the time (it being recognized by the Purchasers that projections are not to be viewed as facts and that the actual results during the period or periods covered by such projections may vary from such projections); provided further that with respect to information relating to the Company’s industry generally and trade data which relates to a Person that is not the Company or a Subsidiary thereof, the Company represents and warrants only that such information is believed by it in good faith to be accurate in all material respects.

Section 5.24.

Private Offering by the Company .  Neither the Company nor anyone acting on its behalf has offered the Notes or any similar Securities for sale to, or solicited any offer to buy the Notes or any similar Securities from, or otherwise approached or negotiated in respect thereof with, any Person other than the Purchasers, each of which has been offered the Notes at a private sale for investment.  Neither the Company nor anyone acting on its behalf has taken, or will take, any action that would subject the issuance or sale of the Notes to the registration requirements of section 5 of the Securities Act or to the registration requirements of any Securities or blue sky laws of any applicable jurisdiction.

Section 5.25.

Security Documents.   The Security Documents are effective to create in favor of the Collateral Agent, for the benefit of the holders of the Notes and the other holders of Secured Obligations, a legal, valid and enforceable security interest in the Collateral and the proceeds thereof.  In the case of certificated Pledged Stock described in the Security Agreement, in addition to filing the financing statements specified on Schedule 5.25 to the Disclosure Letter in the appropriate form in the offices specified on Schedule 5.25 to the Disclosure Letter, when the certificates representing such certificated Equity Interests pledged thereunder have been delivered to the Collateral Agent, in each case duly endorsed or accompanied by duly executed instruments of assignment or transfer in blank, the Security Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of each Transaction Party in such Collateral and the proceeds thereof, as security for the Secured Obligations, in each case prior and superior in right to any other Person other than the other holders of Secured Obligations.  In the case of the Collateral (other than certificated Equity Interests) described in the Security Agreement, when financing statements in appropriate form are filed in the offices specified on Schedule 5.25 to the Disclosure Letter, the Security Agreement shall constitute a fully perfected Lien on, and security interest in, all right, title and interest of the Transaction Parties in such Collateral and the proceeds thereof, as security for the Secured Obligations, in each case prior and superior in right to any other Person (except Liens permitted by Section 10.2) to the extent any such security interest may be perfected by the filing of a financing statement.



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Section 5.26.

Notes Rank Pari Passu.   The Notes shall at all times remain direct obligations of the Company ranking pari passu with all other Notes from time to time issued and outstanding hereunder without any preference among themselves and all other Obligations of the Company shall remain pari passu with all other Secured Obligations (actual or contingent) of the Company.

SECTION 6.

R EPRESENTATIONS OF THE P URCHASERS .

Section 6.1.

Purchase for Investment, Etc .  

(a)

Each Purchaser severally represents that it is purchasing the Notes for its own account or for one or more separate accounts maintained by such Purchaser or for the account of one or more pension or trust funds and not with a view to the distribution thereof, provided that the disposition of such Purchaser’s or their property shall at all times be within such Purchaser’s or their control.  Each Purchaser understands that the Notes have not been registered under the Securities Act and may be resold only if registered pursuant to the provisions of the Securities Act or if an exemption from registration is available, except under circumstances where neither such registration nor such an exemption is required by law, and that the Company is not required to register the Notes.

(b)

Each Purchaser severally represents that it is (1) a Qualified Institutional Buyer or (2) an “accredited investor” as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act acting for its own account (and not for the account of others) or as a fiduciary or agent for others (which others are also “accredited investors”).

Section 6.2.

Source of Funds .  Each Purchaser severally represents that at least one of the following statements is an accurate representation as to each source of funds (a “Source” ) to be used by such Purchaser to pay the purchase price of the Notes to be purchased by such Purchaser hereunder:

(a)

the Source is an “insurance company general account” (as the term is defined in the United States Department of Labor’s Prohibited Transaction Exemption ( “PTE” ) 95-60) in respect of which the reserves and liabilities (as defined by the annual statement for life insurance companies approved by the NAIC (the “NAIC Annual Statement” )) for the general account contract(s) held by or on behalf of any employee benefit plan together with the amount of the reserves and liabilities for the general account contract(s) held by or on behalf of any other employee benefit plans maintained by the same employer (or affiliate thereof as defined in PTE 95-60) or by the same employee organization in the general account do not exceed 10% of the total reserves and liabilities of the general account (exclusive of separate account liabilities) plus surplus as set forth in the NAIC Annual Statement filed with such Purchaser’s state of domicile; or

(b)

the Source is a separate account that is maintained solely in connection with such Purchaser’s fixed contractual obligations under which the amounts payable, or credited, to any employee benefit plan (or its related trust) that has any interest in such



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separate account (or to any participant or beneficiary of such plan (including any annuitant)) are not affected in any manner by the investment performance of the separate account; or

(c)

the Source is either (i) an insurance company pooled separate account, within the meaning of PTE 90-1 or (ii) a bank collective investment fund, within the meaning of PTE 91-38 and, except as disclosed by such Purchaser to the Company in writing pursuant to this clause (c), no employee benefit plan or group of plans maintained by the same employer or employee organization beneficially owns more than 10% of all assets allocated to such pooled separate account or collective investment fund; or

(d)

the Source constitutes assets of an “investment fund” (within the meaning of Part VI of PTE 84-14 (the “QPAM Exemption” )) managed by a “qualified professional asset manager” or “QPAM” (within the meaning of Part VI of the QPAM Exemption), no employee benefit plan’s assets that are managed by the QPAM in such investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization and managed by such QPAM, represent more than 20% of the total client assets managed by such QPAM, the conditions of Part I(c) and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a person controlling or controlled by the QPAM maintains an ownership interest in the Company that would cause the QPAM and the Company to be “related” within the meaning of Part VI(h) of the QPAM Exemption and the identity of such QPAM has been disclosed to the Company in writing pursuant to this clause (d) and, at the option of such Purchaser, such Purchaser may disclose to the Company the names of any employee benefit plans whose assets in the investment fund, when combined with the assets of all other employee benefit plans established or maintained by the same employer or by an affiliate (within the meaning of Part VI(c)(1) of the QPAM Exemption) of such employer or by the same employee organization, represent 10% or more of the assets of such investment fund; or

(e)

the Source constitutes assets of a “plan(s)” (within the meaning of Part IV(h) of PTE 96-23 (the “INHAM Exemption” )) managed by an “in-house asset manager” or “INHAM” (within the meaning of Part IV(a) of the INHAM Exemption), the conditions of Part I(a), (g) and (h) of the INHAM Exemption are satisfied, neither the INHAM nor a person controlling or controlled by the INHAM (applying the definition of “control” in Part IV(d)(3) of the INHAM Exemption) owns a 10% or more interest in the Company and (i) the identity of such INHAM and (ii) the name(s) of the employee benefit plan(s) whose assets constitute the Source have been disclosed to the Company in writing pursuant to this clause (e); or

(f)

the Source is a governmental plan; or

(g)

the Source is one or more employee benefit plans, or a separate account or trust fund comprised of one or more employee benefit plans, each of which has been identified to the Company in writing pursuant to this clause (g); or



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(h)

the Source does not include assets of any employee benefit plan, other than a plan exempt from the coverage of ERISA.

As used in this Section 6.2, the terms “employee benefit plan,” “governmental plan,” and “separate account” shall have the respective meanings assigned to such terms in section 3 of ERISA.

SECTION 7.

I NFORMATION AS TO C OMPANY .

Section 7.1.

Financial Statements and Budgets .  The Company shall deliver to each holder of a Note that is an Institutional Investor, in form and detail reasonably satisfactory to the Required Holders:

(a)

Annual Financial Statements.  As soon as practicable and in any event within 90 days (or, if earlier, on the date of any required public filing thereof (after giving effect to any extensions for filing under Rule 12b-25 promulgated under the Exchange Act)) after the end of each Fiscal Year (commencing with the Fiscal Year ended July 31, 2015), an audited Consolidated balance sheet of the Company and its Subsidiaries as of the close of such Fiscal Year and audited Consolidated statements of income, retained earnings and cash flows including the notes thereto, all in reasonable detail setting forth in comparative form the corresponding figures as of the end of and for the preceding Fiscal Year and prepared in accordance with GAAP and, if applicable, containing disclosure of the effect on the financial position or results of operations of any change in the application of accounting principles and practices during the year.  Such annual financial statements shall be audited by an independent certified public accounting firm of recognized national standing, and accompanied by a report and opinion thereon by such certified public accountants prepared in accordance with generally accepted auditing standards that is not subject to any “going concern” or similar qualification or exception or any qualification as to the scope of such audit or with respect to accounting principles followed by the Company or any of its Subsidiaries not in accordance with GAAP.

(b)

Quarterly Financial Statements.  As soon as practicable and in any event within 45 days (or, if earlier, on the date of any required public filing thereof (after giving effect to any extensions for filing under Rule 12b-25 promulgated under the Exchange Act)) after the end of the first three fiscal quarters of each Fiscal Year (commencing with the fiscal quarter ended January 31, 2015), an unaudited Consolidated balance sheet of the Company and its Subsidiaries as of the close of such fiscal quarter and unaudited Consolidated statements of income and cash flows, including the notes thereto, all in reasonable detail setting forth in comparative form the corresponding figures as of the end of and for the corresponding period in the preceding Fiscal Year and prepared by the Company in accordance with GAAP and, if applicable, containing disclosure of the effect on the financial position or results of operations of any change in the application of accounting principles and practices during the period, and certified by the chief financial officer of the Company to present fairly in all material respects the financial condition of the Company and its Subsidiaries on a Consolidated basis as of their respective dates and the results of operations of the Company and its Subsidiaries



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for the respective periods then ended, subject to normal year-end adjustments and the absence of footnotes.

(c)

Annual Projections.  As soon as practicable and in any event within 120 days after the end of each Fiscal Year, a projected income statement, balance sheet and statement of cash flows of the Company and its Subsidiaries, on a consolidated basis for the upcoming Fiscal Year, accompanied by a certificate from a Responsible Officer of the Company to the effect that such projected income statement, balance sheet and statement of cash flows contain good faith projections (utilizing assumptions believed to be reasonable at the time of delivery of such projections) of the consolidated financial condition and operations of the Company and its Subsidiaries for such period.

Section 7.2.

Certificates; Other Reports.  The Company shall deliver to the holders of Notes:

(a)

at each time financial statements are delivered pursuant to Sections 7.1(a) or (b), (i) a duly completed Officer’s Compliance Certificate signed by the chief executive officer, chief financial officer, vice president of finance treasurer or controller of the Company, (ii) a report containing management’s discussion and analysis of such financial statements and (iii) a calculation of Excess Cash Flow; provided, however, that such calculation of Excess Cash Flow shall only be required annually (with financial statements delivered pursuant to Section 7.1(a)) unless the Total Net Leverage Ratio as of the most recent fiscal quarter end is greater than or equal to 3.00 to 1.00;

(b)

promptly upon receipt thereof, copies of all reports, if any, submitted to the Company or its boards of directors by its independent public accountants in connection with their auditing function, including, without limitation, any management report and any management responses thereto;

(c)

promptly after the furnishing thereof, copies of any statement or report with respect to any event of default furnished to any holder of Indebtedness of any Transaction Party or any Subsidiary thereof in excess of the Threshold Amount pursuant to the terms of any indenture, loan or credit or similar agreement;

(d)

promptly after the institution or filing thereof, notice of any action or proceeding against any Transaction Party or any Subsidiary thereof with respect to any Environmental Law that could reasonably be expected to have a Material Adverse Effect;

(e)

promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the Company generally in their capacity as such, and copies of all annual, regular, periodic and special reports and registration statements which the Company may file or be required to file with the SEC under Section 13 or 15(d) of the Exchange Act, and in any case not otherwise required to be delivered to the holders of Notes pursuant hereto;

(f)

promptly, and in any event within five Business Days after receipt thereof by any Transaction Party or any Subsidiary thereof, copies of each material notice or other material correspondence received from the SEC (or comparable agency in any



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applicable non-U.S. jurisdiction) concerning any investigation by such agency regarding financial or other operational results of any Transaction Party or any Subsidiary thereof;

(g)

promptly upon the request thereof, such other information and documentation required by bank regulatory authorities under applicable “know your customer” and anti-money laundering rules and regulations (including, without limitation, the PATRIOT Act), as from time to time reasonably requested by the any holder of a Note; and

(h)

such other information regarding the operations, business affairs and financial condition of any Transaction Party or any Subsidiary thereof as any holder of a Note may reasonably request.

Documents required to be delivered pursuant to Section 7.1(a) or (b) or Section 7.2(e) or any management report required to be delivered pursuant to Section 7.2(a) (to the extent any such documents or reports are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (1) on which the Company posts such documents, or provides a link thereto on the Company’s website on the Internet at the website address, which is located at http://copart.com as of the Closing Date; or (2) on which such documents are posted on the Company’s behalf on an Internet or intranet website, if any, to which each holder of a Notes has free access; provided that the Company shall notify each holder of Notes (by facsimile or electronic mail) of the posting of any such documents.  Notwithstanding anything contained herein, in every instance the Company shall be required to provide (by facsimile or electronic mail) copies of the Officer’s Compliance Certificates required by Section 7.2 to the holders of Notes.  

Section 7.3.

Notice of Litigation and Other Matters.  The Company shall promptly (but in no event later than 10 Business Days after any Responsible Officer of any Transaction Party obtains knowledge thereof) notify the holders of Notes in writing of:

(a)

the occurrence of any Default or Event of Default;

(b)

the commencement of all proceedings and investigations by or before any Governmental Authority and all actions and proceedings in any court or before any arbitrator against or involving any Transaction Party or any Subsidiary thereof or any of their respective properties, assets or businesses in each case that if adversely determined could reasonably be expected to result in a Material Adverse Effect;

(c)

any notice of any violation received by any Transaction Party or any Subsidiary thereof from any Governmental Authority including, without limitation, any notice of violation of Environmental Laws which in any such case could reasonably be expected to have a Material Adverse Effect;

(d)

any labor controversy that has resulted in, or threatens to result in, a strike or other work action against any Transaction Party or any Subsidiary thereof that could reasonably be expected to have a Material Adverse Effect;



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(e)

any attachment, judgment, lien, levy or order exceeding the Threshold Amount assessed against any Transaction Party or any Subsidiary thereof;

(f)

any event which constitutes or which with the passage of time or giving of notice or both would constitute a default or event of default under any Material Contract to which the Company or any of its Subsidiaries is a party or by which the Company or any Subsidiary thereof or any of their respective properties may be bound which could reasonably be expected to have a Material Adverse Effect;

(g)

(i) with respect to any Plan, any reportable event, as defined in section 4043(c) of ERISA and the regulations thereunder, for which notice thereof has not been waived pursuant to such regulations as in effect on the date hereof; (ii) the taking by the PBGC of steps to institute, or the threatening by the PBGC of the institution of, proceedings under section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by the PBGC with respect to such Multiemployer Plan; or (iii) any event, transaction or condition that could result in the incurrence of any liability by the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to Plans, or in the imposition of any Lien on any of the rights, properties or assets of the Company or any ERISA Affiliate pursuant to Title I or IV of ERISA or such penalty or excise tax provisions, in all cases if such liability or Lien could reasonably be expected to have a Material Adverse Effect;

(h)

promptly, any other development or event which could reasonably be expected to have a Material Adverse Effect; and

(i)

copies of all material notices relating to the Credit Agreement or any Additional Pari Passu Debt Agreement received from or sent to the creditors thereunder.

Each notice pursuant to Section 7.3 (other than Section 7.3(i)) shall be accompanied by a statement of a Responsible Officer of the Company setting forth details of the occurrence referred to therein and stating what action the Company has taken and proposes to take with respect thereto.  Each notice pursuant to Section 7.3(a) shall describe with particularity any and all provisions of this Agreement and any other Transaction Document that have been breached.

Section 7.4.

Visits and Inspections .  Each Transaction Party shall permit representatives of the Collateral Agent or any Significant Holder ( provided , that during any period when an Event of Default has occurred and is continuing, each Transaction Party shall permit representatives of the Collateral Agent or any holder of Notes), from time to time upon prior reasonable notice and at such times during normal business hours, all at the expense of the Company, to visit and inspect its properties; inspect, audit and make extracts from its books, records and files, including, but not limited to, management letters prepared by independent accountants; and discuss with its principal officers, and its independent accountants, its business, assets, liabilities, financial condition and results of operations; provided that excluding any such visits and inspections during the continuation of an Event of Default, no holder of Notes shall exercise such rights more often than one time during any calendar year at the Company’s



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expense; provided further that upon the occurrence and during the continuance of an Event of Default, any holder of Notes may do any of the foregoing at the expense of the Company at any time without advance notice.  

SECTION 8.

P AYMENT AND P REPAYMENT OF THE N OTES .

Section 8.1.

Required Prepayments .  

(a)

Maturity Date.  As provided therein, the entire unpaid principal balance of each Note shall be due and payable on the Maturity Date thereof.

(b)

Required Prepayment Pursuant to Intercreditor Agreement.  If any amounts are to be applied to the principal of the Notes on any date pursuant to the terms of the Intercreditor Agreement, such principal amount of the Notes, together with interest and any Excess Leverage Fee thereon to such date and together with the Make-Whole Amount, if any, with respect to each Note, shall be due and payable on such date.  

Section 8.2.

Optional Prepayments with Make-Whole Amount .  The Company may, at its option, upon notice as provided below, prepay at any time all, or from time to time any part of, the Notes of any series, in an amount not less than $1,000,000 in aggregate principal amount of the Notes of such series then outstanding in the case of a partial prepayment, at 100% of the principal amount so prepaid, and the Make-Whole Amount determined for the prepayment date with respect to such principal amount; provided, that (a) the Company may not prepay the Notes in whole or in part pursuant to this Section 8.2 without the written consent of the Required Holder(s) if all or any portion of the funds paid to the holders of the Notes in such prepayment is or could be required to be shared with the other holders of Secured Obligations or delivered to the Collateral Agent under the Intercreditor Agreement and (b) the Company may not prepay any series of Notes under this Section 8.2 if a Default or Event of Default shall exist or would result from such optional prepayment unless all Notes at the time outstanding are prepaid on a pro rata basis.  The Company will give each holder of Notes of each series to be prepaid written notice of each optional prepayment under this Section 8.2 not less than five days and not more than 60 days prior to the date fixed for such prepayment unless the Company and the Required Holders agree to another time period pursuant to Section 17.  Each such notice shall specify such date (which shall be a Business Day), the aggregate principal amount of the Notes of each series to be prepaid on such date, the principal amount of each Note held by such holder to be prepaid (determined in accordance with Section 8.3), and the interest and any Excess Leverage Fee to be paid on the prepayment date with respect to such principal amount being prepaid, and shall be accompanied by a certificate of a Senior Financial Officer as to the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation.  Two Business Days prior to such prepayment, the Company shall deliver to each holder of Notes being prepaid a certificate of a Senior Financial Officer specifying the calculation of such Make-Whole Amount as of the specified prepayment date.

Section 8.3.

Allocation of Partial Prepayments .  In the case of each partial prepayment of the Notes (i) pursuant to Section 8.1(b), the principal amount of the Notes shall be allocated among all of the Notes at the time outstanding in proportion, as nearly as practicable, to



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the respective unpaid principal amounts thereof not theretofore called for prepayment and (ii) of a series pursuant to Section 8.2, the principal amount of the Notes of the series being prepaid to be prepaid shall be allocated among all of the Notes of such series at the time outstanding in proportion, as nearly as practicable, to the respective unpaid principal amounts thereof not theretofore called for prepayment.  All prepayments pursuant to Section 8.6 shall be applied to the Notes for which the payment offered thereunder has been accepted in accordance with that Section.  All prepayments pursuant to Section 8.7 shall be applied to the Notes for which the prepayment offered thereunder has been accepted.

Section 8.4.

Maturity; Surrender, Etc .   In the case of each optional prepayment of Notes pursuant to this Section 8, the principal amount of each Note to be prepaid shall mature and become due and payable on the date fixed for such prepayment, together with interest and Excess Leverage Fee, if any, on such principal amount accrued to such date and the applicable Make-Whole Amount, if any.  From and after such date, unless the Company shall fail to pay such principal amount when so due and payable, together with the interest and Make-Whole Amount, if any, as aforesaid, interest on such principal amount shall cease to accrue.  Any Note paid or prepaid in full shall be surrendered to the Company and cancelled and shall not be reissued, and no Note shall be issued in lieu of any prepaid principal amount of any Note.

Section 8.5.

Purchase of Notes .  The Company will not and will not permit any Affiliate to purchase, redeem, prepay or otherwise acquire, directly or indirectly, any of the outstanding Notes except upon the payment or prepayment of the Notes in accordance with this Agreement and the Notes.  The Company will promptly cancel all Notes acquired by it or any Affiliate pursuant to any payment or prepayment of Notes pursuant to this Agreement and no Notes may be issued in substitution or exchange for any such Notes.

Section 8.6.

Offer to Prepay Upon Asset Dispositions and Insurance and Condemnation Events.

(a)

Excess Proceeds.   Upon an Asset Disposition (other than any Asset Disposition permitted pursuant to, and in accordance with, clauses (a) through (e) of Section 10.5) or any Insurance and Condemnation Event, the Net Cash Proceeds received by the Company or its Subsidiaries may be applied:

(i)

in the case of any Asset Disposition by a Subsidiary that is not a Subsidiary Guarantor or consisting of Equity Interests of a Subsidiary that is not a Subsidiary Guarantor, to repay Indebtedness of such Subsidiary, or

(ii)

to reinvest in or acquire assets (including Equity Interests or other assets acquired in connection with a Permitted Acquisition or that would constitute a Permitted Investment) used or useful in a business permitted under Section 10.11; provided that to the extent the assets subject to such Asset Disposition were Collateral, such newly acquired assets shall also be Collateral.

If any Net Cash Proceeds are not applied or invested (or committed pursuant to a written agreement to be applied or invested) as provided in subclause (i) or (ii) above within 365 days after receipt (or in the case of any amount committed to be so applied or reinvested,



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which are not actually so applied or reinvested within 180 days following such 365 day period), such Net Cash Proceeds will be deemed to constitute “Excess Proceeds.”  

(b)

Notice and Offer.  The Company shall, within three Business Days following the earlier to occur of (i) the date on which the aggregate amount of Excess Proceeds exceeds $25,000,000 during any Fiscal Year (or, if such threshold is not met during any Fiscal Year, within five Business Days following the end of such Fiscal Year), the Company shall give written notice thereof to each holder of Notes (an “Excess Proceeds Prepayment Event” ).  Such notice shall contain, and shall constitute, an irrevocable offer to prepay Notes in an aggregate amount equal to the Ratable Portion of such Excess Proceeds on the date specified in such notice (the “Excess Proceeds Prepayment Date” ) which date shall be not less than 15 Business Days nor more than 30 days after the date of such offer.

(c)

Acceptance and Payment.  A holder of Notes may accept or reject the offer to prepay pursuant to this Section 8.6 by causing a notice of such acceptance or rejection to be delivered to the Company at least 10 days prior to the Excess Proceeds Prepayment Date.  A failure by a holder of the Notes to respond to an offer to prepay made pursuant to this Section 8.6 shall be deemed to constitute a rejection of such offer by such holder.  If accepted, such offered prepayment in respect of the Ratable Portion of the Notes of each holder that has accepted such offer shall be due and payable on the Excess Proceeds Prepayment Date.  Such offered prepayment shall be made at 100% of the aggregate Ratable Portion of the Notes of each holder that has accepted such offer, together with interest and any Excess Leverage Fee on that portion of the Notes then being prepaid accrued to the Excess Proceeds Prepayment Date but without any Make-Whole Amount.

(d)

Officer’s Certificate.  Each offer to prepay the Notes pursuant to this Section 8.6 shall be accompanied by a certificate, executed by a Senior Financial Officer of the Company and dated the date of such offer, specifying: (1) the Excess Proceeds Prepayment Date; (2) that such offer is being made pursuant to this Section 8.6 and that the failure by a holder to respond to such offer by the deadline established in Section 8.6(c) shall result in such offer to such holder being deemed rejected; (3) the Ratable Portion of each such Note offered to be prepaid; (4) the interest and Excess Leverage Fee, if any, that would be due on the Ratable Portion of each such Note offered to be prepaid, accrued to the Excess Proceeds Prepayment Date; (5) that the conditions of this Section 8.6 have been satisfied and (6) in reasonable detail, a description of the nature and date of the Asset Disposition of Insurance and Condemnation Event giving rise to such offer of prepayment.

Section 8.7.

Prepayment Upon Change of Control.  

(a)

Notice of Change of Control or Control Event.  The Company will, within five Business Days after any Responsible Officer has knowledge of the occurrence of any Change of Control or Control Event, give written notice of such Change of Control or Control Event to each holder of Notes.  If a Change of Control has occurred or does occur, such notice shall contain and constitute an offer to prepay Notes as described



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in Section 8.7(c) and shall be accompanied by the certificate described in Section 8.7(g).  For the avoidance of doubt, such notice in respect of any Change of Control need not be given if a notice was already given in respect of the corresponding Control Event.

(b)

[Reserved].  

(c)

Offer to Prepay Notes.  The offer to prepay Notes contemplated by Section 8.7(a) shall be an offer to prepay, in accordance with and subject to this Section 8.7, all, but not less than all, Notes held by each holder on a date specified in such offer (the “Change of Control Proposed Prepayment Date” ).  The Change of Control Proposed Prepayment Date shall be a Business Day (i) not less than 30 days and not more than 60 days after the date of such offer (or if the Proposed Prepayment Date shall not be specified in such offer, the Proposed Prepayment Date shall be the Business Day nearest to the 30th day after the date of such offer) or (ii) if later than the dates set forth in clause (i), the date of consummation of the Change of Control.  For the avoidance of doubt, an offer to prepay the Notes in respect of any Change of Control need not be made if such offer was already made in respect of the corresponding Control Event.

(d)

Acceptance; Rejection.  A holder of Notes may accept or reject the offer to prepay made pursuant to this Section 8.7 by causing a notice of such acceptance or rejection to be delivered to the Company at least five Business Days prior to the Change of Control Proposed Prepayment Date.  A failure by a holder of Notes to so respond to an offer to prepay made pursuant to this Section 8.7 shall be deemed to constitute an acceptance of such offer by such holder.

(e)

Prepayment.  Prepayment of the Notes to be prepaid pursuant to this Section 8.7 shall be at 100% of the principal amount of such Notes, plus the Make-Whole Amount determined for the date of prepayment with respect to such principal amount, together with accrued and unpaid interest and any Excess Leverage Fee accrued to the date of prepayment.  On the Business Day preceding the date of prepayment, the Company shall deliver to each holder of Notes being prepaid a statement showing the Make-Whole Amount due in connection with such prepayment and setting forth the details of the computation of such amount.  The prepayment shall be made on the Change of Control Proposed Prepayment Date, except as provided by Section 8.7(f).

(f)

Deferral Pending Change of Control.  The obligation of the Company to prepay Notes pursuant to the offers required by Section 8.7(c) and accepted in accordance with Section 8.7(d) is subject to the occurrence of the Change of Control in respect of which such offers and acceptances shall have been made.  In the event that such Change of Control does not occur on the Change of Control Proposed Prepayment Date in respect thereof, the prepayment shall be deferred until, and shall be made on the date on which, such Change of Control occurs.  The Company shall keep each holder of Notes reasonably and timely informed of (1) any such deferral of the date of prepayment, (2) the date on which such Change of Control and the prepayment are expected to occur and (3) any determination by the Company that efforts to effect such Change of Control have ceased or been abandoned (in which case the offers and acceptances made pursuant



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to this Section 8.7 in respect of such Change of Control automatically shall be deemed rescinded without penalty or other liability).

(g)

Officer’s Certificate.  Each offer to prepay the Notes pursuant to this Section 8.7 shall be accompanied by a certificate, executed by a Senior Financial Officer of the Company and dated the date of such offer, specifying (1) the Change of Control Proposed Prepayment Date, (2) that such offer is made pursuant to this Section 8.7 and that failure by a holder to respond to such offer by the deadline established in Section 8.7(d) shall result in such offer to such holder being deemed accepted, (3) the principal amount of each Note offered to be prepaid, (4) the estimated Make-Whole Amount due in connection with such prepayment (calculated as if the date of such notice were the date of the prepayment), setting forth the details of such computation, (5) the interest and Excess Leverage Fee that would be due on each Note offered to be prepaid, accrued to the Change of Control Proposed Prepayment Date, (6) that the conditions of this Section 8.7 have been fulfilled and (7) in reasonable detail, the nature and date of the Change of Control.

Section 8.8.

Make-Whole Amount .

“Make-Whole Amount” means, with respect to any Note, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled Payments with respect to the Called Principal of such Note over the amount of such Called Principal, provided that the Make-Whole Amount may in no event be less than zero.  For the purposes of determining the Make-Whole Amount, the following terms have the following meanings:

“Called Principal” means, with respect to any Note, the principal of such Note that is to be prepaid pursuant to Section 8.1(b), 8.2 or 8.7 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

“Discounted Value” means, with respect to the Called Principal of any Note, the amount obtained by discounting all Remaining Scheduled Payments with respect to such Called Principal from their respective scheduled due dates to the Settlement Date with respect to such Called Principal, in accordance with accepted financial practice and at a discount factor (applied on the same periodic basis as that on which interest on the Notes is payable) equal to the Reinvestment Yield with respect to such Called Principal.

“Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by the ask-side yield(s) reported as of 10:00 a.m. (New York City time) on the second Business Day preceding the Settlement Date with respect to such Called Principal, on the display designated as “Page PX1” (or such other display as may replace Page PX1) on Bloomberg Financial Markets for the most recently issued actively traded on-the-run U.S. Treasury securities ( “Reported” ) having a maturity equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  If there are no such U.S. Treasury securities Reported having a maturity equal to such Remaining Average Life, then such implied yield to maturity will be determined by (a) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted financial practice and (b) interpolating linearly between the yields Reported for the applicable most recently issued actively traded on-the-run U.S. Treasury



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securities with the maturities (1) closest to and greater than such Remaining Average Life and (2) closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.  

If such yields are not Reported or the yields Reported as of such time are not ascertainable (including by way of interpolation), then “Reinvestment Yield” means, with respect to the Called Principal of any Note, 0.50% over the yield to maturity implied by the U.S. Treasury constant maturity yields reported, for the latest day for which such yields have been so reported as of the second Business Day preceding the Settlement Date with respect to such Called Principal, in Federal Reserve Statistical Release H.15 (or any comparable successor publication) for the U.S. Treasury constant maturity having a term equal to the Remaining Average Life of such Called Principal as of such Settlement Date.  If there is no such U.S. Treasury constant maturity having a term equal to such Remaining Average Life, such implied yield to maturity will be determined by interpolating linearly between (1) the U.S. Treasury constant maturity so reported with the term closest to and greater than such Remaining Average Life and (2) the U.S. Treasury constant maturity so reported with the term closest to and less than such Remaining Average Life.  The Reinvestment Yield shall be rounded to the number of decimal places as appears in the interest rate of the applicable Note.

“Remaining Average Life” means, with respect to any Called Principal, the number of years obtained by dividing (i) such Called Principal into (ii) the sum of the products obtained by multiplying (a) the principal component of each Remaining Scheduled Payment with respect to such Called Principal by (b) the number of years, computed on the basis of a 360-day year composed of twelve 30-day months and calculated to two decimal places, that will elapse between the Settlement Date with respect to such Called Principal and the scheduled due date of such Remaining Scheduled Payment.

“Remaining Scheduled Payments” means, with respect to the Called Principal of any Note, all payments of such Called Principal and interest and, to the extent the Excess Leverage Fee is applicable at the time of any determination thereof, Excess Leverage Fee (assuming that Excess Leverage Fee would continue to be applicable) that would be due after the Settlement Date with respect to such Called Principal if no payment of such Called Principal were made prior to its scheduled due date, provided that if such Settlement Date is not a date on which payments of interest and Excess Leverage Fee are due to be made under the Notes, then the amount of the next succeeding scheduled payments of interest and Excess Leverage Fee  will be reduced by the amount of interest accrued to such Settlement Date and required to be paid on such Settlement Date pursuant to Section 8.4 or Section 12.1.

“Settlement Date” means, with respect to the Called Principal of any Note, the date on which such Called Principal is to be prepaid pursuant to Section 8.1(b), 8.2 or 8.7 or has become or is declared to be immediately due and payable pursuant to Section 12.1, as the context requires.

Section 8.9.

Payments Due on Non-Business Days .  Anything in this Agreement or the Notes to the contrary notwithstanding, (x) subject to clause (y), any payment of interest on any Note that is due on a date that is not a Business Day shall be made on the next succeeding Business Day without including the additional days elapsed in the computation of the interest



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payable on such next succeeding Business Day; and (y) any payment of principal of or Make-Whole Amount on any Note (including principal due on the Maturity Date of such Note) that is due on a date that is not a Business Day shall be made on the next succeeding Business Day and shall include the additional days elapsed in the computation of interest payable on such next succeeding Business Day.

SECTION 9.

A FFIRMATIVE C OVENANTS.

The Company covenants that so long as any of the Notes are outstanding:

Section 9.1.

Compliance with Laws .  Without limiting Section 9.12 or Section 10.18, the Company will, and will cause each of its Subsidiaries to, comply with all laws, ordinances or governmental rules or regulations to which each of them is subject, including, without limitation, ERISA, Environmental Laws, the USA PATRIOT Act and the other laws and regulations that are referred to in Section 5.20, and will obtain and maintain in effect all licenses, certificates, permits, franchises and other governmental authorizations necessary to the ownership of their respective properties or to the conduct of their respective businesses, in each case to the extent necessary to ensure that non-compliance with such laws, ordinances or governmental rules or regulations or failures to obtain or maintain in effect such licenses, certificates, permits, franchises and other governmental authorizations could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 9.2.

Insurance .  The Company will, and will cause each of its Subsidiaries to, maintain insurance with financially sound and reputable insurance companies against at least such risks and in at least such amounts as are customarily maintained by similar businesses and as may be required by Applicable Law and as are required by any Security Documents.  All such insurance shall, (a) name the Collateral Agent as an additional insured party thereunder and (b) in the case of each casualty insurance policy, name the Collateral Agent as lender’s loss payee.  

Section 9.3.

Maintenance of Properties .  In addition to the requirements of the Security Documents, the Company will, and will cause each of its Subsidiaries to, maintain and keep, or cause to be maintained and kept, their respective properties in good repair, working order and condition (other than ordinary wear and tear), so that the business carried on in connection therewith may be properly conducted at all times, in each case except where the failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 9.4.

Payment of Taxes and Claims .  The Company will, and will cause each of its Subsidiaries to, file all U.S. federal tax returns and all other material tax returns required to be filed in any jurisdiction and to pay and discharge all taxes shown to be due and payable on such returns and all other taxes, assessments, governmental charges, or levies imposed on them or any of their properties, assets, income or franchises, to the extent the same have become due and payable and before they have become delinquent and all claims for which sums have become due and payable that have or might become a Lien on properties or assets of the Company or any Subsidiary, provided that neither the Company nor any Subsidiary need pay any such tax, assessment, charge, levy or claim if (i) the amount, applicability or validity thereof is contested



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by the Company or such Subsidiary on a timely basis in good faith and in appropriate proceedings, and the Company or a Subsidiary has established adequate reserves therefor in accordance with GAAP on the books of the Company or such Subsidiary or (ii) the nonpayment of all such taxes, assessments, charges, levies and claims could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

Section 9.5.

Corporate Existence, Etc .  The Company will at all times preserve and keep its corporate existence in full force and effect.  Subject to Sections 10.4 and 10.5, the Company will at all times preserve and keep in full force and effect the corporate existence of each of its Subsidiaries (unless merged into the Company or a Wholly-Owned Subsidiary) and all rights and franchises of the Company and its Subsidiaries unless the termination of or failure to preserve and keep in full force and effect such corporate existence, right or franchise could not, individually or in the aggregate, have a Material Adverse Effect.

Section 9.6.

Books and Records .  The Company will, and will cause each of its Subsidiaries to, maintain proper books of record and account from which financial statements may be prepared in conformity with GAAP and all applicable requirements of any Governmental Authority having legal or regulatory jurisdiction over the Company, such Subsidiary or any of their respective Properties, as the case may be.  The Company and its Subsidiaries have devised a system of internal accounting controls sufficient to provide reasonable assurances that their respective books, records, and accounts accurately reflect all transactions and dispositions of assets and the Company will, and will cause each of its Subsidiaries to, continue to maintain such system.

Section 9.7.

Additional Subsidiaries.

(a)

Additional Domestic Subsidiaries.  The Company will, and will cause each of its Subsidiaries to, promptly after the creation or acquisition of any Domestic Subsidiary that is not an Excluded Subsidiary or any formerly Excluded Subsidiary ceases to be an Excluded Subsidiary (and, in any event, within 45 days after such creation, acquisition or change (which change shall be determined and be deemed to have occurred at the time financial statements for the applicable period have been provided by the Company pursuant to this Agreement), as such time period may be extended by the Collateral Agent in its sole discretion) cause such Person or any other Person that guarantees the obligations under any Material Credit Facility to (i) become a Guarantor by delivering to the Collateral Agent (with a copy to each holder of Notes) a duly executed supplement to the Subsidiary Guaranty or such other document as the Required Holders shall deem appropriate for such purpose, (ii) grant a security interest in all Collateral (subject to the exceptions specified in the Security Agreement) owned by such Subsidiary by delivering to the Collateral Agent (with a copy to each holder of Notes) a duly executed supplement to each applicable Security Document or such other document as the Collateral Agent or the Required Holders shall deem appropriate for such purpose and comply with the terms of each applicable Security Document, (iii) deliver to the Collateral Agent (with a copy to each holder of Notes) such opinions, documents and certificates as may be reasonably requested by the Collateral Agent or the Required Holders, (iv) to the extent required by the Security Agreement, deliver to the Collateral Agent such original certificated Equity Interests or other certificates and stock or other



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transfer powers evidencing the Equity Interests of such Person (to the extent certificated), (v) deliver to the Collateral Agent and the holders of Notes such updated Schedules to the Transaction Documents as reasonably requested by the Collateral Agent or the Required Holders with respect to such Person, and (vi) deliver to the Collateral Agent (with a copy to each holder of Notes) such other documents as may be reasonably requested by the Collateral Agent or the Required Holders, all in form, content and scope reasonably satisfactory to the Collateral Agent and the Required Holders.

(b)

Additional Foreign Subsidiaries.  The Company will, and will cause each of its Subsidiaries to, notify the Collateral Agent and each holder of Notes promptly after any Person becomes a First Tier Foreign Subsidiary, and promptly thereafter (and, in any event, within 45 days after such notification, as such time period may be extended by the Collateral Agent in its sole discretion), cause (i) the applicable Transaction Party to deliver to the Collateral Agent (with a copy to each holder of Notes) Security Documents pledging 65% of the total outstanding voting Equity Interests (and 100% of the non-voting Equity Interests) of any such new First Tier Foreign Subsidiary and a consent thereto executed by such new First Tier Foreign Subsidiary (including, without limitation, if applicable, original certificated Equity Interests (or the equivalent thereof pursuant to the Applicable Laws and practices of any relevant foreign jurisdiction) evidencing the Equity Interests of such new First Tier Foreign Subsidiary, together with an appropriate undated stock or other transfer power for each certificate duly executed in blank by the registered owner thereof), (ii) such Person to deliver to the Collateral Agent (with a copy to each holder of Notes) such opinions, documents and certificates as may be reasonably requested by the Collateral Agent or the Required Holders, (iii) such Person to deliver to the Collateral Agent and the holders of Notes such updated Schedules to the Transaction Documents as requested by the Collateral Agent or the Required Holders with respect to such Person and (iv) such Person to deliver to the Collateral Agent such other documents as may be reasonably requested by the Collateral Agent or the Required Holders, all in form, content and scope reasonably satisfactory to the Collateral Agent and the Required Holders.  Notwithstanding the foregoing, in no event shall any Transaction Party or any Subsidiary thereof be required to deliver any documents governed by, or take any action with respect to any pledge of such new First Tier Foreign Subsidiary under, the laws of any non-U.S. jurisdiction.

(c)

Merger Subsidiaries.  Notwithstanding the foregoing, to the extent any new Subsidiary is created solely for the purpose of consummating a merger transaction pursuant to a Permitted Acquisition, and such new Subsidiary at no time holds any assets or liabilities other than any merger consideration contributed to it contemporaneously with the closing of such merger transaction, such new Subsidiary shall not be required to take the actions set forth in Section 9.7(a) or (b), as applicable, until the consummation of such Permitted Acquisition (at which time, the surviving entity of the respective merger transaction shall be required to so comply with Section 9.7(a) or (b), as applicable, within 45 days of the consummation of such Permitted Acquisition, as such time period may be extended by the Collateral Agent in its sole discretion).

(d)

Exclusions.  The provisions of this Section 9.7 shall not apply to assets as to which the Collateral Agent and the Company shall reasonably determine that the costs



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and burdens of obtaining a security interest therein or perfection thereof outweigh the value of the security afforded thereby.

Section 9.8.

Subsidiary Guarantors.  Without limiting the provisions of Section 9.7, the Company will cause each of its Subsidiaries that guarantees or otherwise becomes liable at any time, whether as a borrower or an additional or co-borrower or otherwise, for or in respect of any Indebtedness under any Material Credit Facility to concurrently therewith:

(a)

enter into a joinder to the Subsidiary Guaranty or such other agreement in form and substance reasonably satisfactory to the Required Holders providing for the guaranty by such Subsidiary, on a joint and several basis with all other such Subsidiaries, of (i) the prompt payment in full when due of all amounts payable by the Company pursuant to the Notes (whether for principal, interest, Make-Whole Amount or otherwise) and this Agreement, including, without limitation, all indemnities, fees and expenses payable by the Company thereunder and (ii) the prompt, full and faithful performance, observance and discharge by the Company of each and every covenant, agreement, undertaking and provision required pursuant to the Notes or this Agreement to be performed, observed or discharged by it; and

(b)

deliver the following to each of holder of a Note:

(i)

an executed counterpart of such Subsidiary Guaranty or such other agreement;

(ii)

a certificate signed by an authorized responsible officer of such Subsidiary containing representations and warranties on behalf of such Subsidiary to the same effect, mutatis mutandis , as those contained in Sections 5.1, 5.3 and 5.4 of this Agreement (but, if applicable, with respect to such Subsidiary and such Subsidiary Guaranty or other agreement rather than the Company);

(iii)

all documents as may be reasonably requested by the Required Holders to evidence the due organization, continuing existence and good standing of such Subsidiary and the due authorization by all requisite action on the part of such Subsidiary of the execution and delivery of such Subsidiary Guaranty or other agreement and the performance by such Subsidiary of its obligations thereunder; and

(iv)

an opinion of counsel reasonably satisfactory to the Required Holders covering such matters relating to such Subsidiary and such Subsidiary Guaranty or other agreement as the Required Holders may reasonably request.

Section 9.9.

Excess Leverage Fee.  In the event the Consolidated Total Net Leverage Ratio exceeds 3.00 to 1.00 as of the last day of each of four consecutive fiscal quarters, the Company agrees that, in addition to interest accruing on the Notes, the Company will pay to each holder of a Note a fee at a rate per annum equal to 0.50% (each such fee, an “Excess Leverage Fee” ) on the outstanding principal amount of each Note held by such holder during the period beginning on the Business Day after the Company delivers the Officer’s Compliance Certificate pursuant to Section 7.2(a) for such fiscal quarter until the Business Day after the Company has



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demonstrated that the Consolidated Total Net Leverage Ratio has been 3.00 to 1.00 or less as of the last day of each of four consecutive fiscal quarters and the Company shall have delivered the Officer’s Compliance Certificate pursuant to Section 7.2(a) for such fourth consecutive fiscal quarter.  In the event the Company fails to deliver an Officer’s Compliance Certificate for any fiscal quarter, for purposes of this Section 9.9, the Consolidated Total Net Leverage Ratio shall be deemed to be in excess of 3.00 to 1.00 for such fiscal quarter until such time as such Officer’s Compliance Certificate is delivered, and from and after the date such Officer’s Compliance Certificate is delivered, the applicability of the Excess Leverage Fee shall be determined by reference to the Consolidated Total Net Leverage Ratio as of the last day of the applicable fiscal quarter.  The Excess Leverage Fee with respect to each Note shall be calculated on the same basis as interest on such Note is calculated and shall be paid in arrears at the same time accrued interest is paid on such Note.  The payment of any Excess Leverage Fee shall not constitute a waiver of any Default or Event of Default.

Section 9.10.

Most Favored Lender Status.  

(a)

If the Company or any Subsidiary shall (i) enter into, assume or otherwise become bound by or obligated under any Material Credit Facility which contains one or more Additional Covenants or Additional Defaults, or (ii) amend any Material Credit Facility to include one or more Additional Covenants or Additional Defaults, then, in either case, the terms of this Agreement shall, without any further action on the part of the Company, any Subsidiary or any of the holders of the Notes, be deemed to be amended automatically to include each Additional Covenant or Additional Default contained in such Material Credit Facility.  The Company further covenants to promptly execute and deliver at its expense (including the reasonable and documented fees and expenses of counsel for the holders of the Notes for which invoices have been provided to the Company) an amendment to this Agreement in form and substance reasonably satisfactory to the Required Holders evidencing the amendment of this Agreement to include such Additional Covenants and Additional Defaults, provided that the execution and delivery of such amendment shall not be a precondition to the effectiveness of such amendment as provided for in this Section 9.10(a), but shall merely be for the convenience of the parties hereto.

(b)

During any period when no Default or Event of Default has occurred and is continuing, any Additional Covenant or Additional Default incorporated into this Agreement pursuant to Section 9.10(a) shall automatically without any action required to be taken by the Company or any holder of Notes be deemed deleted from this Agreement at such time as the Material Credit Facility containing such Additional Covenant or Additional Default is terminated and no amounts of principal or interest shall be outstanding thereunder and the Company shall promptly (but in any event within five Business Days from the occurrence thereof) provide written notice thereof to the holders of the Notes, which notice shall refer specifically to this Section 9.10, shall include a statement that no Default or Event of Default is then in existence and shall describe in reasonable detail the relevant Material Credit Facility which has been terminated and the Additional Covenant(s) or Additional Default(s) affected thereby.  Notwithstanding the foregoing, and for the avoidance of doubt, in no event shall the covenants or defaults in this agreement be deleted or amended, restated or otherwise modified pursuant to this



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Section 9.10 in a way that would be less beneficial, directly or indirectly, to the holders of the Notes than such covenants and defaults as in effect on the Closing Date (and as amended or modified other than pursuant to Section 9.10).  Upon the request of the Company, the holders of the Notes shall, at the expense of the Company (including the reasonable and documented fees and expenses of counsel for the holders of the Notes for which invoices have been provided to the Company), enter into an additional agreement, waiver or an amendment to this Agreement (as the Required Holders may request), evidencing the deletion of any such Additional Covenant or Additional Default as set forth above, provided that the execution and delivery of such amendment, waiver or agreement shall not be a precondition to the effectiveness of such amendment, waiver or agreement as provided for in this Section 9.10(b), but shall merely be for the convenience of the parties hereto.

Section 9.11.

Notes to Rank Pari Passu.   The Notes and all other Obligations of the Company at all times shall remain direct obligations of the Company ranking pari passu as against the assets of the Company with all other Notes from time to time issued and outstanding hereunder without any preference among themselves and pari passu with all other present and future Secured Obligations.

Section 9.12.

Environmental Laws.   In addition to and without limiting the generality of Section 9.1, the Company will, and will cause each of its Subsidiaries to, except as would not reasonably be expected to result in a Material Adverse Effect (a) comply with all applicable Environmental Laws and obtain and comply with and maintain any and all licenses, approvals, notifications, registrations or permits required by applicable Environmental Laws and (b) conduct and complete all investigations, studies, sampling and testing, and all remedial, removal and other actions required under Environmental Laws, and promptly comply with all lawful orders and directives of any Governmental Authority regarding Environmental Laws.

Section 9.13.

Use of Proceeds.   The Company shall use the proceeds of the issuance and sale of the Notes (i) to finance Capital Expenditures, (ii) pay fees, commissions and expenses in connection with the Transactions, and (iii) for working capital and general corporate purposes of the Company and its Subsidiaries.

Section 9.14.

Further Assurances.  

(a)

The Transaction Parties will, and will cause each of their Subsidiaries to, execute any and all further documents, financing statements, agreements and instruments, and take all such further actions (including the filing and recording of financing statements and other documents), which may be required under any Applicable Law, or which the Collateral Agent or the Required Holders may reasonably request, to effectuate the transactions contemplated by the Transaction Documents or to grant, preserve, protect or perfect the Liens created or intended to be created by the Security Documents or the validity or priority of any such Lien, all at the expense of the Transaction Parties.  The Company also agrees to provide to the Collateral Agent and the holders of Notes, from time to time upon the reasonable request by the Collateral Agent or the Required Holders, evidence reasonably satisfactory to the Collateral Agent and the Required Holders as to



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the perfection and priority of the Liens created or intended to be created by the Security Documents.

(b)

In the event the Company or any other Transaction Party maintains its primary operating deposit accounts with a bank that is not party to the Intercreditor Agreement as a Senior Lender (as defined in the Intercreditor Agreement), the Transaction Parties will cause the accounts with such bank to be subject to deposit account control agreements in favor of the Collateral Agent in form and substance sufficient to perfect the security interest in such accounts under applicable law.

Section 9.15.

Post-Closing Matters.  The Transaction Parties will, and will cause each of their Subsidiaries to, execute and deliver the documents and complete the tasks set forth on Schedule 9.15, in each case within the time limits specified on such schedule.

SECTION 10.

N EGATIVE C OVENANTS .

The Transaction Parties covenant that so long as any of the Notes are outstanding:

Section 10.1.

Indebtedness.  The Transaction Parties will not, and will not permit any Subsidiary to, create, incur, assume or suffer to exist any Indebtedness except:  

(a)

the Notes and the other Obligations;

(b)

Indebtedness and obligations owing under Hedge Agreements entered into in order to manage existing or anticipated interest rate, exchange rate, commodity price  or other risks and not for speculative purposes;

(c)

Indebtedness existing on the Closing Date and listed on Schedule 10.1 to the Disclosure Letter, and any refinancings, refundings, renewals or extensions thereof; provided that (i) the principal amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder, (ii) the final maturity date and weighted average life of such refinancing, refunding, renewal or extension shall not be prior to or shorter than that applicable to the Indebtedness prior to such refinancing, refunding, renewal or extension and (iii) any refinancing, refunding, renewal or extension of any Subordinated Indebtedness shall be (A) on subordination terms at least as favorable to the holders of Notes as those applicable to the Subordinated Indebtedness being refinanced, (B) no more restrictive on the Company and its Subsidiaries than the Subordinated Indebtedness being refinanced, refunded, renewed or extended and (C) in an amount not less than the amount outstanding at the time of such refinancing, refunding, renewal or extension (the foregoing clauses (A) and (B) being determined by the Company in its reasonable judgment);

(d)

Indebtedness of a Person existing at the time such Person became a Subsidiary or assets were acquired from such Person in connection with an Investment permitted pursuant to Section 10.3, to the extent that (i) such Indebtedness was not incurred in connection with, or in contemplation of, such Person becoming a Subsidiary or the acquisition of such assets, (ii) neither the Company nor any Subsidiary thereof (other than such Person or any other Person that such Person merges with or that acquires the assets of such Person) shall have any liability or other obligation with respect to such



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Indebtedness and (iii) the aggregate outstanding principal amount of such Indebtedness does not exceed $5,000,000 at any time outstanding;

(e)

Guaranty obligations with respect to Indebtedness permitted pursuant to subsections (a) through (d), clause (i), clause (j), clause (n) and clause (o) of this Section 10.1;

(f)

unsecured intercompany Indebtedness:

(i)

owed by any Transaction Party to another Transaction Party;

(ii)

owed by any Transaction Party to any Non-Guarantor Subsidiary ( provided that such Indebtedness shall be subordinated to the Obligations in a manner reasonably satisfactory to the Required Holders);

(iii)

owed by any Non-Guarantor Subsidiary to any other Non-Guarantor Subsidiary; and

(iv)

owed by any Non-Guarantor Subsidiary to any Transaction Party to the extent permitted pursuant to Section 10.3(a)(vi);

(g)

Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or other similar instrument drawn against insufficient funds in the ordinary course of business;

(h)

Indebtedness under performance bonds, surety bonds, release, appeal and similar bonds, statutory obligations or with respect to workers’ compensation claims, in each case incurred in the ordinary course of business, and reimbursement obligations in respect of any of the foregoing;

(i)

Additional Pari Passu Debt, provided that the total aggregate principal amount for all such Additional Pari Passu Debt when combined with the aggregate outstanding amount of any Incremental Loan Commitments (under and as defined in the Credit Agreement) shall not (as of any date of incurrence thereof) exceed $250,000,000 or, if greater, an amount equal to the amount of additional Indebtedness that would not cause the Consolidated Total Net Leverage Ratio as of the four consecutive fiscal quarter period most recently ended prior to the incurrence of such additional Indebtedness, calculated on a Pro Forma Basis after giving effect to the incurrence of such additional Indebtedness (assuming any Incremental Revolving Credit Commitment (as defined in the Credit Agreement is fully drawn but without netting the cash proceeds of such Indebtedness), to exceed 2.50 to 1.00;  

(j)

Indebtedness incurred under the Credit Agreement;

(k)

Indebtedness under the Cash Collateralized Letters of Credit in an aggregate amount not to exceed $25,000,000;



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(l)

Indebtedness arising in connection with customary Cash Management Agreements;

(m)

customer deposits and advance payments received in the ordinary course of business from customers for goods or services purchased in the ordinary course of business;  

(n)

Indebtedness (including purchase money Indebtedness and Capital Leases financing the acquisition, improvement or construction of equipment (and related software), real estate or facilities) of the Transaction Parties and their Subsidiaries in an aggregate principal amount not to exceed 10% of Consolidated Total Assets of the Company and its Subsidiaries at any time outstanding; provided, however, (i) no Default or Event of Default shall exist or result therefrom and (ii) Indebtedness of Foreign Subsidiaries shall not exceed an aggregate principal amount at any time outstanding equal to 7.5% of Consolidated Total Assets of the Company and its Subsidiaries as of the last day of the fiscal quarter most recently ended for which financial statements have been delivered pursuant to Section 7.1; and

(o)

other unsecured Indebtedness of the Transaction Parties so long as (i) no Default or Event of Default shall exist or result therefrom and (ii) before and after giving effect thereto on a Pro Forma Basis the Consolidated Total Net Leverage Ratio of the Company and its Subsidiaries (without any deductions with respect to the cash proceeds of any such Indebtedness in calculating net Indebtedness) is less than 3.25 to 1.00.  

Section 10.2.

Liens.  The Transaction Parties will not, and will not permit any Subsidiary to, create, incur, assume or suffer to exist, any Lien on or with respect to any of its Property, whether now owned or hereafter acquired, except:

(a)

Liens in favor of the Collateral Agent to secure the Notes and the other Secured Obligations so long as the Intercreditor Agreement is in effect;

(b)

Liens in existence on the Closing Date and described on Schedule 10.2 to the Disclosure Letter, and the replacement, renewal or extension thereof (including Liens incurred, assumed or suffered to exist in connection with any refinancing, refunding, renewal or extension of Indebtedness pursuant to Section 10.1(c) (solely to the extent that such Liens were in existence on the Closing Date and described on Schedule 10.2 to the Disclosure Letter)); provided that the scope of any such Lien shall not be increased, or otherwise expanded, to cover any additional property or type of asset, as applicable, beyond that in existence on the Closing Date, except for products and proceeds of the foregoing;

(c)

Liens for taxes, assessments and other governmental charges or levies (excluding any Lien imposed pursuant to any of the provisions of ERISA or Environmental Laws) (i) not yet due or as to which the period of grace (not to exceed 30 days), if any, related thereto has not expired or (ii) which are being contested in good faith and by appropriate proceedings if adequate reserves are maintained to the extent required by GAAP;



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(d)

Liens of materialmen, mechanics, carriers, warehousemen, processors or landlords for labor, materials, supplies or rentals incurred in the ordinary course of business, which (i) are not overdue for a period of more than 30 days, or if more than 30 days overdue, no action has been taken to enforce such Liens and such Liens are being contested in good faith and by appropriate proceedings if adequate reserves are maintained to the extent required by GAAP and (ii) do not, individually or in the aggregate, materially impair the use thereof in the operation of the business of the Company or any of its Subsidiaries;

(e)

deposits or pledges made in the ordinary course of business in connection with, or to secure payment of, obligations under workers’ compensation, unemployment insurance and other types of social security or similar legislation, or to secure the performance of bids, trade contracts and leases (other than Indebtedness), statutory obligations, surety bonds (other than bonds related to judgments or litigation), performance bonds and other obligations of a like nature incurred in the ordinary course of business, in each case, so long as no foreclosure sale or similar proceeding has been commenced with respect to any portion of the Collateral on account thereof;

(f)

encumbrances in the nature of zoning restrictions, easements and rights or restrictions of record on the use of real property, which in the aggregate are not substantial in amount and which do not, in any case, detract from the value of such property or impair the use thereof in the ordinary conduct of business;

(g)

Liens arising from the filing of precautionary UCC financing statements relating solely to personal property leased pursuant to operating leases entered into in the ordinary course of business of the Company and its Subsidiaries;

(h)

Liens securing (i) purchase money Indebtedness and Capital Leases permitted under Section 10.1(n); provided that (A) such Liens shall be created substantially simultaneously with the acquisition, repair, improvement or lease, as applicable, of the related Property, (B) such Liens do not at any time encumber any property other than the Property financed by such Indebtedness (together with additions, accessions and improvements thereto and the proceeds and products thereof), (C) the amount of Indebtedness secured thereby is not increased and (D) the principal amount of Indebtedness secured by any such Lien shall at no time exceed 100% of the original price for the purchase, repair improvement or lease amount (as applicable) of such Property at the time of purchase, repair, improvement or lease (as applicable); and (ii) Liens securing Indebtedness of Foreign Subsidiaries permitted under Section 10.1(n);

(i)

Liens securing judgments for the payment of money not constituting an Event of Default under Section 11(i) or securing appeal or other surety bonds relating to such judgments;

(j)

(i) Liens on Property (i) of any Subsidiary which are in existence at the time that such Subsidiary is acquired pursuant to a Permitted Acquisition and (ii) of the Company or any of its Subsidiaries existing at the time such tangible property or tangible assets are purchased or otherwise acquired by the Company or such Subsidiary thereof



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pursuant to a transaction permitted pursuant to this Agreement; provided that, with respect to each of the foregoing clauses (i) and (ii), (A) such Liens are not incurred in connection with, or in anticipation of, such Permitted Acquisition, purchase or other acquisition, (B) such Liens are applicable only to specific Property and the proceeds thereof, (C) such Liens are not “blanket” or all asset Liens, (D) such Liens do not attach to any other Property of the Company or any of its Subsidiaries and (E) the Indebtedness secured by such Liens is permitted under Section 10.1(d) of this Agreement);

(k)

Liens arising as a matter of law or created in the ordinary course of business in the nature of (i) normal and customary rights of setoff and bankers’ liens upon deposits of cash in favor of banks or other depository institutions and (ii) Liens securing reasonable and customary fees for services in favor of banks, securities intermediaries or other depository institutions;

(l)

Liens of (i) a collecting bank arising in the ordinary course of business under Section 4-210 of the Uniform Commercial Code in effect in the relevant jurisdiction and (ii) any depositary bank in connection with statutory, common law and contractual rights of set-off and recoupment with respect to any deposit account of the Company or any Subsidiary thereof;

(m)

(i) contractual or statutory Liens of landlords to the extent relating to the property and assets relating to any lease agreements with such landlord, and (ii) contractual Liens of suppliers (including sellers of goods) or customers granted in the ordinary course of business to the extent limited to the property or assets relating to such contract;

(n)

any interest or title of a licensor, sublicensor, lessor or sublessor with respect to any assets under any license or lease agreement entered into in the ordinary course of business which do not (i) interfere in any material respect with the business of the Company or its Subsidiaries or materially detract from the value of the relevant assets of the Company or its Subsidiaries or (ii) secure any Indebtedness;

(o)

Liens securing Indebtedness (i) permitted under Sections 10.1(i) and (j), in each case, to the extent such Liens are subject to the Intercreditor Agreement and (ii) permitted under Sections 10.1(k);

(p)

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

(q)

customary Liens on insurance proceeds securing financed insurance premiums in the ordinary course of business;

(r)

Liens on any cash earnest money deposit made by the Company or any Subsidiary in connection with any letter of intent or acquisition agreement relating to a Permitted Acquisition, Disposition or other transaction that is not prohibited by this Agreement;



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(s)

customary Liens granted in favor of a trustee pursuant to an indenture relating to Indebtedness not prohibited under this Agreement to the extent such Liens (i) only secure customary compensation, indemnification and reimbursement obligations owing to such trustee under such indenture and (ii) are limited to the cash held by such trustee (excluding cash held in trust for the payment of such Indebtedness);

(t)

deposits as security for contested taxes or contested import or customs duties;

(u)

customary Liens granted in the ordinary course of business securing any overdraft and related liabilities arising under Cash Management Agreements;

(v)

customary rights of first refusal, voting, redemption, transfer or other restrictions with respect to the Equity Interests in any joint venture entities or other Persons that are not Subsidiaries;

(w)

Liens on cash and Cash Equivalents arising in connection with the defeasance, discharge or redemption of Indebtedness not prohibited by this Agreement;

(x)

assignments of the right to receive income effected as part of the sale of a Subsidiary or a business unit that is otherwise permitted pursuant to Section 10.5; and

(y)

other Liens securing Indebtedness or other obligations permitted hereunder in an aggregate principal amount at any time outstanding not exceeding $5,000,000.

Notwithstanding anything to the contrary contained in this Section 10.2, the Company shall not permit any of its owned real property assets to be subject to any Lien (other than as permitted pursuant to Section 10.2(h) or Section 10.2(j)) securing funded Indebtedness.  

Section 10.3.

Investments.  The Transaction Parties will not, and will not permit any Subsidiary to, purchase, own, invest in or otherwise acquire (in one transaction or a series of transactions), directly or indirectly, any Equity Interests (including, without limitation, the creation or capitalization of any Subsidiary), evidence of Indebtedness or other obligation or security, substantially all or a portion of the business or assets of any other Person or any other investment or interest whatsoever in any other Person, or make or permit to exist, directly or indirectly, any loans, advances or extensions of credit to, or any investment in cash or by delivery of Property in, any Person (all the foregoing, “Investments” ) except:

(a)

(i)

Investments existing on the Closing Date in Subsidiaries existing on the Closing Date;

(ii)

Investments existing on the Closing Date (other than Investments in Subsidiaries existing on the Closing Date) and described on Schedule 10.3 to the Disclosure Letter;



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(iii)

Investments made after the Closing Date by any Transaction Party in any other Transaction Party;

(iv)

Investments made after the Closing Date by any Non-Guarantor Subsidiary in any other Non-Guarantor Subsidiary;

(v)

Investments made after the Closing Date by any Non-Guarantor Subsidiary in any Transaction Party;

(vi)

Investments made after the Closing Date by any Transaction Party in any Non-Guarantor Subsidiary in an aggregate amount at any time outstanding not to exceed $10,000,000 ( provided that any Investments in the form of loans or advances made by any Transaction Party to any Non-Guarantor Subsidiary pursuant to this clause (vi) shall be evidenced by a demand note in form and substance reasonably satisfactory to the Required Holders); and

(vii)

intercompany charges of expenses in the ordinary course of business;

(b)

Investments in cash and Investments constituting Cash Equivalents at the time acquired;

(c)

advances to officers, directors and employees of the Company and Subsidiaries made in the ordinary course of business and substantially consistent with past practice for travel, entertainment, relocation, commission advances and analogous ordinary business purposes;

(d)

deposits made in the ordinary course of business to secure the performance of leases or other obligations as permitted by Section 10.2;

(e)

Hedge Agreements permitted pursuant to Section 10.1;

(f)

purchases of assets in the ordinary course of business;

(g)

Investments by the Company or any Subsidiary thereof in the form of Permitted Acquisitions;

(h)

Investments in the form of Restricted Payments permitted pursuant to Section 10.6;

(i)

Guarantee obligations permitted pursuant to Section 10.1 and guarantees in respect of obligations that do not constitute Indebtedness;

(j)

Investments consisting of extensions of credit in the nature of accounts receivable (including intercompany receivables and intercompany charges or expenses) or notes receivable arising from the grant of trade credit in the ordinary course of business, prepayments or other credits to suppliers or vendors made in the ordinary course of business and Investments received in satisfaction or partial satisfaction thereof



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from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;

(k)

Investments held by any Person that becomes a Subsidiary of the Company after the date hereof pursuant to a Permitted Acquisition; provided that such Investments are existing at the time such Person becomes a Subsidiary of the Company and were not made in contemplation of such Permitted Acquisition;

(l)

to the extent permitted by Section 10.5, Investments consisting of non-cash consideration received for any Disposition permitted by Section 10.5;

(m)

Investments that consist of or result from a merger or consolidation permitted by Section 10.4;

(n)

Investments so long as the Consolidated Total Net Leverage Ratio both before and after giving effect to any such Investment on a Pro Forma Basis is less than 3.00 to 1.00; provided, that, (i) both before and after giving effect to any such Investment pursuant to this clause on a Pro Forma Basis (A) Minimum Liquidity shall be not less than $75,000,000 and (B) no Default or Event of Default shall have occurred and be continuing and (ii) this clause (n) shall not be used to consummate Acquisitions; and

(o)

Investments so long as the Consolidated Total Net Leverage Ratio both before and after giving effect to any such Investment on a Pro Forma Basis is less than 3.25 to 1.00, in an aggregate amount not to exceed the Available Amount; provided, that, (i) both before and after giving effect to any such Investment pursuant to this clause on a Pro Forma Basis (A) Minimum Liquidity shall be not less than $75,000,000 and (B) no Default or Event of Default shall have occurred and be continuing and (ii) this clause (o) shall not be used to consummate Acquisitions.   

For purposes of determining the amount of any Investment outstanding for purposes of this Section 10.3, such amount shall be deemed to be the amount of such Investment when made, purchased or acquired (without adjustment for subsequent increases or decreases in the value of such Investment) less any amount realized in respect of such Investment upon the sale, collection or return of capital (not to exceed the original amount invested).

Section 10.4.

Fundamental Changes .  The Transaction Parties will not, and will not permit any Subsidiary to, merge, consolidate or consummate any similar combination with, or consummate any Asset Disposition of all or substantially all of its assets (whether in a single transaction or a series of transactions) with, any other Person or liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution) except:

(a)

(i) any Wholly-Owned Subsidiary of the Company may be merged, amalgamated or consolidated with or into the Company ( provided that the Company shall be the continuing or surviving entity) or (ii) any Wholly-Owned Subsidiary of the Company may be merged, amalgamated or consolidated with or into any Subsidiary Guarantor ( provided that the Subsidiary Guarantor shall be the continuing or surviving entity or simultaneously with such transaction, the continuing or surviving entity shall



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become a Subsidiary Guarantor and the Company shall comply with Section 9.7 and Section 9.8 in connection therewith);

(b)

(i) any Non-Guarantor Subsidiary that is a Foreign Subsidiary may be merged, amalgamated or consolidated with or into, or be liquidated into, any other Non-Guarantor Subsidiary and (ii) any Non-Guarantor Subsidiary that is a Domestic Subsidiary may be merged, amalgamated or consolidated with or into, or be liquidated into, any other Non-Guarantor Subsidiary that is a Domestic Subsidiary;

(c)

any Subsidiary may dispose of all or substantially all of its assets (upon voluntary liquidation, dissolution, winding up or otherwise) to the Company or any Subsidiary Guarantor; provided that, with respect to any such disposition by any Non-Guarantor Subsidiary, the consideration for such disposition shall not exceed the fair value of such assets;

(d)

(i) any Non-Guarantor Subsidiary that is a Foreign Subsidiary may dispose of all or substantially all of its assets (upon voluntary liquidation, dissolution, winding up or otherwise) to the Company or any Subsidiary and (ii) any Non-Guarantor Subsidiary that is a Domestic Subsidiary may dispose of all or substantially all of its assets (upon voluntary liquidation, dissolution, winding up or otherwise) to any other Non-Guarantor Subsidiary that is a Domestic Subsidiary;

(e)

any Wholly-Owned Subsidiary of the Company may merge with or into the Person such Wholly-Owned Subsidiary was formed to acquire in connection with any acquisition permitted hereunder (including, without limitation, any Permitted Acquisition permitted pursuant to Section 10.3(g)); provided that if any Transaction Party is a party thereto, such Transaction Party (or a Person who concurrently therewith becomes a Transaction Party) will be the surviving corporation;

(f)

any Subsidiary that is not a Transaction Party may liquidate or dissolve if (i) such liquidation or dissolution is not materially disadvantageous to the holders and (ii) all assets of such liquidated or dissolved Subsidiary, after payment of all creditors of such Subsidiary, shall be conveyed to the Company or a Subsidiary;

(g)

any Person may merge into the Company or any of its Wholly-Owned Subsidiaries in connection with a Permitted Acquisition permitted pursuant to Section 10.3(g); provided that (i) in the case of a merger involving the Company or a Subsidiary Guarantor, the continuing or surviving Person shall be the Company or such Subsidiary Guarantor and (ii) the continuing or surviving Person shall be the Company or a Wholly-Owned Subsidiary of the Company; and

(h)

Asset Dispositions permitted pursuant to Section 10.5(d) or Section 10.5(f).

Section 10.5.

Asset Dispositions.  The Transaction Parties will not, and will not permit any Subsidiary to, make any Asset Disposition except:



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(a)

the sale of obsolete, worn-out or surplus assets no longer used or usable in the business of the Company or any of its Subsidiaries;

(b)

non-exclusive licenses and sublicenses of intellectual property rights in the ordinary course of business not interfering, individually or in the aggregate, in any material respect with the conduct of the business of the Company and its Subsidiaries;

(c)

leases, subleases, licenses or sublicenses of real or personal property granted by the Company or any of its Subsidiaries to others in the ordinary course of business not detracting from the value of such real or personal property or interfering in any material respect with the business of the Company or any of its Subsidiaries;

(d)

Asset Dispositions in connection with Insurance and Condemnation Events; provided that the requirements of Section 8.6 are complied with in connection therewith;

(e)

Assets Dispositions in connection with transactions permitted by Section 10.4; and

(f)

Asset Dispositions not otherwise permitted pursuant to this Section; provided that (i) at the time of such Asset Disposition, no Default or Event of Default shall exist or would result from such Asset Disposition, (ii) such Asset Disposition is made for fair market value and the consideration received shall be no less than 75% in cash or Cash Equivalents, and (iii) the aggregate fair market value of all property disposed of in reliance on this clause (f) shall not exceed (1) to the extent the Total Net Leverage Ratio both before and after giving effect to such Asset Disposition is less than or equal to 3.00 to 1.00, 3.0% of Consolidated Total Assets of the Company and its Subsidiaries (measured as of the end of the most recent fiscal quarter) during any Fiscal Year and (2) to the extent the Total Net Leverage Ratio both before and after giving effect to such Asset Disposition is greater than 3.00 to 1.00, $25,000,000 in any Fiscal Year.

Section 10.6.

Restricted Payments.  The Transaction Parties will not, and will not permit any Subsidiary to, declare or pay any dividend on, or make any payment or other distribution on account of, or purchase, redeem, retire or otherwise acquire (directly or indirectly), or set apart assets for a sinking or other analogous fund for the purchase, redemption, retirement or other acquisition of, any class of Equity Interests of any Transaction Party or any Subsidiary thereof, or make any distribution of cash, property or assets to the holders of shares of any Equity Interests of any Transaction Party or any Subsidiary thereof (all of the foregoing, the “Restricted Payments” ) provided that:

(a)

the Company or any of its Subsidiaries may pay dividends in shares of its own Qualified Equity Interests;

(b)

any Subsidiary of the Company may pay cash dividends to the Company or any Subsidiary Guarantor;



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(c)

any Non-Guarantor Subsidiary may make Restricted Payments to the Company or any other Subsidiary (and, if applicable, to other holders of its outstanding Equity Interests on a ratable basis);

(d)

so long as (i) no Default or Event of Default has occurred or would result therefrom and (ii) the Company is in compliance with each of the financial covenants contained in Section 10.15 both before and after giving effect to thereto on a Pro Forma Basis, repurchases of up to $550,000,000 of common Equity Interests of the Company within 12 months following the Closing Date; provided that the Company shall immediately retire any such Equity Interests which it repurchases;

(e)

the Company may declare and make (and each Subsidiary of the Company may declare and make to enable the Company to do the same) Restricted Payments not otherwise permitted by this Section, (i) so long as the Consolidated Total Net Leverage Ratio both before and after giving effect to any such Restricted Payment on a Pro Forma Basis is less than 3.00 to 1.00, in an unlimited amount and (ii) if clause (i) is not available, so long as the Consolidated Total Net Leverage Ratio both before and after giving effect to any such Restricted Payment on a Pro Forma Basis is less than 3.25 to 1.00, in an aggregate amount not to exceed the Available Amount; provided, that, Minimum Liquidity shall be not less than $75,000,000 both before and after giving effect to any such Restricted Payment pursuant to this clause (e) on a Pro Forma Basis;

(f)

the Company and its Subsidiaries may make non-cash Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for management, employees or other eligible service providers of the Company and its Subsidiaries or in connection with a Permitted Acquisition involving the issuance of Equity Interests of the Company to its employees or other eligible service providers outside of a stock option or benefit plan that are subject to vesting and forfeiture conditions;

(g)

the Company may repurchase or pay cash in lieu of fractional shares of its Equity Interests arising out of stock dividends, splits or combinations, business combinations or conversions of convertible securities, or the exercise of warrants or the net share settlement thereof;

(h)

the Company and its Subsidiaries may pay withholding taxes in connection with the retention of Equity Interests pursuant to equity-based compensation plans;

(i)

the Company or any Subsidiary may receive or accept the return to the Company or any Subsidiary of Equity Interests of the Company or any Subsidiary constituting a portion of the purchase price consideration in settlement of indemnification claims;

(j)

the Company may distribute rights pursuant to a stockholder rights plan or make redemptions of such rights; provided that (i) such redemptions are in accordance



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with the terms of such stockholder rights plan and (ii) the aggregate amount of all such redemptions made during the term of this Agreement do not exceed $1,000,000;

(k)

to the extent constituting Restricted Payments, the Company and its Subsidiaries may enter into and consummate transactions expressly permitted by Section 10.4; and

(l)

the Company may make payments or distributions to dissenting stockholders as required by applicable Law.

Section 10.7.

Transactions with Affiliates.  The Transaction Parties will not, and will not permit any Subsidiary to, directly or indirectly enter into any transaction, including, without limitation, any purchase, sale, lease or exchange of Property, the rendering of any service or the payment of any management, advisory or similar fees, with (a) any officer, director, holder of any Equity Interests in, or other Affiliate of, the Company or any of its Subsidiaries or (b) any Affiliate of any such officer, director or holder, other than:

(i)

transactions permitted by Section 10.6;

(ii)

transactions existing on the Closing Date and described on Schedule 10.7 to the Disclosure Letter;

(iii)

transactions between or among the Company and any Subsidiary or between or among Subsidiaries;

(iv)

other transactions in the ordinary course of business on terms as favorable as would be obtained by it on a comparable arm’s-length transaction with an independent, unrelated third party as determined in good faith by the board of directors (or equivalent governing body) of the Company;

(v)

employment and severance arrangements (including equity incentive plans and employee benefit plans and arrangements) and indemnification agreements or arrangements with their respective officers and employees in the ordinary course of business; and

(vi)

payment of customary fees and reasonable out of pocket costs to, and indemnities for the benefit of, directors, officers and employees of the Company and its Subsidiaries in the ordinary course of business to the extent attributable to the ownership or operation of the Company and its Subsidiaries.

Section 10.8.

Accounting Changes; Organizational Documents.

(a)

The Transaction Parties will not, and will not permit any Subsidiary to, change the Fiscal Year end of the Company, or make (without the consent of the Required Holders) any material change in its accounting treatment and reporting practices except as required by GAAP.



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(b)

The Transaction Parties will not, and will not permit any Subsidiary to, amend, modify or change its articles of incorporation (or corporate charter or other similar organizational documents) or amend, modify or change its bylaws (or other similar documents) in any manner materially adverse to the rights or interests of the holders of Notes.

Section 10.9.

Payments and Modifications of Subordinated Indebtedness.

(a)

The Transaction Parties will not, and will not permit any Subsidiary to, amend, modify, waive or supplement any of the terms or provisions of the Credit Agreement, any Additional Pari Passu Debt or Subordinated Indebtedness in any respect which would (i) materially and adversely affect the rights or interests of the holders of Notes hereunder (as determined by the Company in good faith using reasonable judgment) or (ii) cause the representations, warranties, covenants or events of default to be more restrictive than the representations, warranties, covenants or events of default contained herein without first offering to amend this Agreement to include the same such representations, warranties, covenants or events of default hereunder.

(b)

The Transaction Parties will not, and will not permit any Subsidiary to, cancel, forgive, make any voluntary prepayment on, or redeem or acquire for value (including, without limitation, (x) by way of depositing with any trustee with respect thereto money or securities before due for the purpose of paying when due and (y) at the maturity thereof) any Subordinated Indebtedness, except:

(i)

refinancings, refundings, renewals, extensions or exchange of any Subordinated Indebtedness permitted by Section 10.1(c), (f), (n) or (o), and by any subordination provisions applicable thereto;

(ii)

payments and prepayments of any Subordinated Indebtedness made solely with the proceeds of Qualified Equity Interests; and

(iii)

the payment of interest, expenses and indemnities in respect of Subordinated Indebtedness incurred under Section 10.1(c), (f), (n) or (o) (other than any such payments prohibited by any subordination provisions applicable thereto).

Section 10.10.

No Further Negative Pledges; Restrictive Agreements.

(a)

The Transaction Parties will not, and will not permit any Subsidiary to, enter into or assume any agreement prohibiting or otherwise restricting the creation or assumption of any Lien upon its properties or assets to secure the Obligations, whether now owned or hereafter acquired, or requiring the grant of any security for such obligation if security is given for some other obligation, except (i) pursuant to this Agreement and the other Transaction Documents, (ii) pursuant to any document or instrument governing Indebtedness incurred pursuant to Section 10.1(n) ( provided that any such restriction contained therein relates only to the asset or assets financed thereby), (iii) customary restrictions contained in the organizational documents of any Non-Guarantor Subsidiary as of the Closing Date, (iv) customary restrictions in connection



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with any Permitted Lien or any document or instrument governing any Permitted Lien (provided that any such restriction contained therein relates only to the asset or assets subject to such Permitted Lien), (v) restrictions existing on the Closing Date and set forth on Schedule 10.10 to the Disclosure Letter, (vi) restrictions in agreement in connection with Indebtedness permitted by Section 10.1(c), (vii) restrictions contained in the Credit Agreement and the documents and agreements entered into in connection therewith, (viii) restrictions contained in documents and agreements governing Additional Pari Passu Debt, (ix) customary restrictions contained in contractual obligations incurred in the ordinary course of business and on customary terms which limit Liens on such contractual obligation, (x) customary provisions restricting the subletting or assignment of any lease governing a leasehold interest and other customary provisions in licenses and other contracts restricting the assignment thereof, (xi) customary restrictions and conditions contained in any agreement relating to an Asset Sale permitted by Section 10.5; provided that such restrictions and conditions apply only to the asset to be sold, (xii) any prohibition or limitation that exists pursuant to any applicable Requirement of Law, and (xiii) restrictions or prohibitions contained in any agreements binding on any Subsidiary existing prior to the consummation of an acquisition in which such Subsidiary was acquired (and not created in contemplation of such acquisition); provided that such restrictions and prohibitions apply only to such Subsidiary.

(b)

The Transaction Parties will not, and will not permit any Subsidiary to, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Transaction Party or any Subsidiary thereof to (i) pay dividends or make any other distributions to any Transaction Party or any Subsidiary on its Equity Interests or with respect to any other interest or participation in, or measured by, its profits, (ii) pay any Indebtedness or other obligation owed to any Transaction Party or (iii) make loans or advances to any Transaction Party, except in each case for such encumbrances or restrictions existing under or by reason of (A) this Agreement and the other Transaction Documents, (B) Applicable Law, (C) the Credit Agreement and the documents and agreements entered into in connection therewith and (D) restrictions contained in documents and agreements governing Additional Pari Passu Debt.

(c)

The Transaction Parties will not, and will not permit any Subsidiary to, create or otherwise cause or suffer to exist or become effective any consensual encumbrance or restriction on the ability of any Transaction Party or any Subsidiary thereof to (i) sell, lease or transfer any of its properties or assets to any Transaction Party or (ii) act as a Transaction Party pursuant to the Transaction Documents or any renewals, refinancings, exchanges, refundings or extension thereof, except in each case for such encumbrances or restrictions existing under or by reason of (A) this Agreement and the other Transaction Documents, (B) Applicable Law, (C) any document or instrument governing Indebtedness incurred pursuant to Section 10.1(n) ( provided that any such restriction contained therein relates only to the asset or assets acquired in connection therewith), (D) any Permitted Lien or any document or instrument governing any Permitted Lien ( provided that any such restriction contained therein relates only to the asset or assets subject to such Permitted Lien), (E) obligations that are binding on a Subsidiary at the time such Subsidiary first becomes a Subsidiary of the Company, so



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long as such obligations are not entered into in contemplation of such Person becoming a Subsidiary, (F) customary restrictions contained in an agreement related to the sale of Property (to the extent such sale is permitted pursuant to Section 10.5) that limit the transfer of such Property pending the consummation of such sale, (G) customary restrictions in leases, subleases, licenses and sublicenses or asset sale agreements otherwise permitted by this Agreement so long as such restrictions relate only to the assets subject thereto, (H) customary provisions restricting assignment of any agreement entered into in the ordinary course of business, (I) the Credit Agreement and the documents and agreements entered into in connection therewith, (J) documents and agreements governing Additional Pari Passu Debt and (K) documents and agreements governing Indebtedness permitted under Section 10.1(n).

Section 10.11.

Nature of Business.  The Transaction Parties will not, and will not permit any Subsidiary to, engage in any business other than the business conducted by the Company and its Subsidiaries as of the Closing Date and business activities reasonably related or ancillary thereto or that are reasonable extensions thereof.

Section 10.12.

[Reserved].

Section 10.13.

Sale Leasebacks.  Except in connection the incurrence of Indebtedness permitted by Section 10.1(n), the Transaction Parties will not, and will not permit any Subsidiary to, directly or indirectly become or remain liable as lessee or as guarantor or other surety with respect to any lease, whether an operating lease or a Capital Lease, of any Property (whether real, personal or mixed), whether now owned or hereafter acquired, (a) which any Transaction Party or any Subsidiary thereof has sold or transferred or is to sell or transfer to a Person which is not another Transaction Party or Subsidiary of a Transaction Party or (b) which any Transaction Party or any Subsidiary of a Transaction Party intends to use for substantially the same purpose as any other Property that has been sold or is to be sold or transferred by such Transaction Party or such Subsidiary to another Person which is not another Transaction Party or Subsidiary of a Transaction Party in connection with such lease.

Section 10.14.

[Reserved].  

Section 10.15.

Financial Covenants.

(a)

Consolidated Total Net Leverage Ratio.  As of the last day of any fiscal quarter, the Transaction Parties will not permit the Consolidated Total Net Leverage Ratio to be greater than 3.50 to 1.00.

(b)

Consolidated Interest Coverage Ratio.  As of the last day of any fiscal quarter, the Transaction Parties will not permit the Consolidated Interest Coverage Ratio to be less than 3.00 to 1.00.  

Section 10.16.

[Reserved].  

Section 10.17.

Disposal of Subsidiary Interests.  The Transaction Parties will not, and will not permit any Subsidiary to, permit any Domestic Subsidiary to be a non-Wholly-Owned



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Subsidiary except as a result of or in connection with a dissolution, merger, amalgamation, consolidation or disposition permitted by Section 10.4 or 10.5.

Section 10.18.

Terrorism Sanctions Regulations .  The Company will not and will not permit any Controlled Entity (a) to become (including by virtue of being owned or controlled by a Blocked Person), own or control a Blocked Person or any Person that is the target  of sanctions imposed by the United Nations or by the European Union, or (b) directly or indirectly to have any investment in or engage in any dealing or transaction (including, without limitation, any investment, dealing or transaction involving the proceeds of the Notes) with any Person if such investment, dealing or transaction (i) would cause any holder to be in violation of any law or regulation applicable to such holder, or (ii) is prohibited by or subject to sanctions under any U.S. Economic Sanctions, or (c)  to engage, nor shall any Affiliate of either engage, in any activity that could subject such Person or any holder to sanctions under CISADA or any similar law or regulation with respect to Iran or any other country that is subject to U.S. Economic Sanctions.

SECTION 11.

E VENTS OF D EFAULT.

An “Event of Default” shall exist if any of the following conditions or events shall occur and be continuing:

(a)

the Company defaults in the payment of any principal or Make-Whole Amount, if any, on any Note when the same becomes due and payable, whether at maturity or at a date fixed for prepayment or by declaration or otherwise; or

(b)

the Company defaults in the payment of any interest or Excess Leverage Fee on any Note for more than three Business Days after the same becomes due and payable; or

(c)

any Transaction Party or any Subsidiary defaults in the performance of or compliance with any term contained in Section 7.1, Section 7.2, Section 7.3(a), Section 9.5 (solely with respect to the maintenance of the existence of the Company), Section 9.7, Section 9.8, Section 9.13 or Section 10; or  

(d)

any Transaction Party or any Subsidiary defaults in the performance of or compliance with any term contained herein (other than those referred to in Sections 11(a), (b) and (c)), in any Subsidiary Guaranty or in any other Transaction Document and such default is not remedied within 30 days after the earlier of (i) a Responsible Officer obtaining actual knowledge of such default and (ii) the Company receiving written notice of such default from any holder of a Note (any such written notice to be identified as a “notice of default” and to refer specifically to this Section 11(d)); or

(e)

(i) any representation or warranty made in writing by or on behalf of the Company or by any officer of the Company in this Agreement or in any other Transaction Document or any writing furnished by the Company in connection with the transactions contemplated hereby that (1) is subject to materiality or Material Adverse Effect qualifications proves to have been false or incorrect in any respect on the date as of



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which made or (2) is not subject to materiality or Material Adverse Effect qualifications, shall be false or incorrect in any material respect when made or deemed made, or (ii) any representation or warranty made in writing by or on behalf of any Subsidiary Guarantor in this Agreement or in any other Transaction Document or by any officer of such Subsidiary Guarantor in any Subsidiary Guaranty or any writing furnished by any Transaction Party in connection with the Transaction Documents that (1) is subject to materiality or Material Adverse Effect qualifications proves to have been false or incorrect in any respect on the date as of which made or (2) is not subject to materiality or Material Adverse Effect qualifications, shall be false or incorrect in any material respect when made or deemed made; or

(f)

(i) the Company or any Subsidiary is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any Indebtedness that is outstanding in an aggregate principal amount of at least the Threshold Amount beyond any period of grace provided with respect thereto, or (ii) the Company or any Subsidiary is in default in the performance of or compliance with any term of any evidence of any Indebtedness in an aggregate outstanding principal amount of at least the Threshold Amount or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Indebtedness has become, or has been declared (or one or more Persons are entitled to declare such Indebtedness to be), due and payable before its stated maturity or before its regularly scheduled dates of payment, or (iii) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Indebtedness to convert such Indebtedness into equity interests), (x) the Company or any Subsidiary has become obligated to purchase or repay Indebtedness before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least the Threshold Amount, or (y) one or more Persons have the right to require the Company or any Subsidiary so to purchase or repay such Indebtedness; provided that this clause (f) shall not apply to Indebtedness secured by a Permitted Lien that becomes due as a result of the voluntary sale or transfer of the property or assets securing such Indebtedness in a sale or transfer permitted under this Agreement, so long as such Indebtedness is repaid when required under the documents providing for such Indebtedness; or

(g)

the Company or any Subsidiary (other than an Immaterial Subsidiary) (i) admits in writing its inability to pay, its debts as they become due, (ii) files, or consents by answer or otherwise to the filing against it of, a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (iii) makes an assignment for the benefit of its creditors, (iv) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (v) is adjudicated as insolvent or to be liquidated, or (vi) takes corporate action for the purpose of any of the foregoing; or



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(h)

a court or other Governmental Authority of competent jurisdiction enters an order appointing, without consent by the Company or any of its Subsidiaries, a custodian, receiver, trustee or other officer with similar powers with respect to the Company or any Subsidiary (other than an Immaterial Subsidiary) or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company or any of its Subsidiaries (other than an Immaterial Subsidiary), or any such petition shall be filed against the Company or any of its Subsidiaries (other than an Immaterial Subsidiary) and such petition shall not be dismissed within 60 days; or

(i)

one or more final judgments or orders for the payment of money (net of any amounts paid or fully covered by independent third party insurance as to which the relevant insurance company does not dispute coverage) aggregating in excess of the Threshold Amount, including, without limitation, any such final order enforcing a binding arbitration decision, are rendered against one or more of the Company and its Subsidiaries and which judgments are not, within 60 days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 60 days after the expiration of such stay; or

(j)

if (i) any Plan shall fail to satisfy the minimum funding standards of ERISA or the Code for any plan year or part thereof or a waiver of such standards or extension of any amortization period is sought or granted under section 412 of the Code, (ii) a notice of intent to terminate any Plan shall have been filed with the PBGC or the PBGC shall have instituted proceedings under ERISA section 4042 to terminate or appoint a trustee to administer any Plan or the PBGC shall have notified the Company or any ERISA Affiliate that a Plan may become a subject of any such proceedings, (iii) the aggregate “amount of unfunded benefit liabilities” (within the meaning of section 4001(a)(18) of ERISA) under all Plans, determined in accordance with Title IV of ERISA, shall exceed an amount that could reasonably be expected to have a Material Adverse Effect, (iv) the Company or any ERISA Affiliate shall have incurred or is reasonably expected to incur any liability pursuant to Title I or IV of ERISA or the penalty or excise tax provisions of the Code relating to employee benefit plans, (v) the Company or any ERISA Affiliate withdraws from any Multiemployer Plan, or (vi) the Company or any Subsidiary establishes or amends any employee welfare benefit plan that provides post-employment welfare benefits in a manner that would increase the liability of the Company or any Subsidiary thereunder; and any such event or events described in clauses (i) through (vi) of this Section 11(j), either individually or together with any other such event or events, could reasonably be expected to have a Material Adverse Effect.  As used in this Section 11(j), the terms “employee benefit plan” and “employee welfare benefit plan” shall have the respective meanings assigned to such terms in section 3 of ERISA; or

(k)

any provision of any Transaction Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or payment in full of all the Notes, ceases to be in full force and effect; or any



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Transaction Party or any other Person contests in any manner the validity or enforceability of any provision of any Transaction Document; or any Transaction Party denies that it has any or further liability or obligation under any provision of any Transaction Document, or purports to revoke, terminate or rescind any provision of any Transaction Document; or

(l)

any Security Document shall cease to be in full force and effect for any reason whatsoever (other than termination in accordance with its terms) or any Security Document shall, to the extent required thereby, fail or cease to create a valid and perfected first priority Lien on any material portion of the Collateral purported to be covered thereby or the Company or any other Transaction Party shall contest or deny the validity or enforceability in any material respect of any Lien granted under any Security Document or any of its obligations thereunder; or

(m)

any event of default shall occur under the Credit Agreement, any Additional Pari Passu Debt Agreement or any agreement relating to Cash Collateralized Letters of Credit.

SECTION 12.

R EMEDIES ON D EFAULT, E TC .

Section 12.1.

Acceleration .  

(a)

If an Event of Default with respect to the Company described in Section 11(g) or (h) (other than an Event of Default described in clause (i) of Section 11(g) or described in clause (vi) of Section 11(g) by virtue of the fact that such clause encompasses clause (i) of Section 11(g)) has occurred, all the Notes then outstanding shall automatically become immediately due and payable.

(b)

If any other Event of Default has occurred and is continuing, the Required Holders may at any time at its or their option, by notice or notices to the Company, declare all the Notes then outstanding to be immediately due and payable.

(c)

If any Event of Default described in Section 11(a) or (b) has occurred and is continuing, any holder or holders of Notes at the time outstanding affected by such Event of Default may at any time, at its or their option, by notice or notices to the Company, declare all the Notes held by it or them to be immediately due and payable.

Upon any Notes becoming due and payable under this Section 12.1, whether automatically or by declaration, such Notes will forthwith mature and the entire unpaid principal amount of such Notes, plus (x) all accrued and unpaid interest thereon (including, but not limited to, interest accrued thereon at the Default Rate) and any accrued and unpaid Excess Leverage Fee and (y) the Make-Whole Amount determined in respect of such principal amount (to the full extent permitted by applicable law), shall all be immediately due and payable, in each and every case without presentment, demand, protest or further notice, all of which are hereby waived.  The Company acknowledges, and the parties hereto agree, that each holder of a Note has the right to maintain its investment in the Notes free from repayment by the Company (except as herein specifically provided for) and that the provision for payment of a Make-Whole Amount by the



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Company in the event that the Notes are prepaid or are accelerated as a result of an Event of Default, is intended to provide compensation for the deprivation of such right under such circumstances.

Section 12.2.

Other Remedies .  If any Default or Event of Default has occurred and is continuing, and irrespective of whether any Notes have become or have been declared immediately due and payable under Section 12.1, the holder of any Note at the time outstanding may proceed to protect and enforce the rights of such holder by an action at law, suit in equity or other appropriate proceeding, whether for the specific performance of any agreement contained herein or in any Note or Subsidiary Guaranty, or for an injunction against a violation of any of the terms hereof or thereof, or in aid of the exercise of any power granted hereby or thereby or by law or otherwise.

Section 12.3.

Rescission .  At any time after any Notes have been declared due and payable pursuant to Section 12.1(b) or (c), the Required Holders, by written notice to the Company, may rescind and annul any such declaration and its consequences if (a) the Company has paid all overdue interest and Excess Leverage Fee on the Notes, all principal of and Make-Whole Amount, if any, on any Notes that are due and payable and are unpaid other than by reason of such declaration, and all interest on such overdue principal and Make-Whole Amount, if any, and (to the extent permitted by applicable law) any overdue interest in respect of the Notes, at the Default Rate, (b) neither the Company nor any other Person shall have paid any amounts which have become due solely by reason of such declaration, (c) all Events of Default and Defaults, other than non-payment of amounts that have become due solely by reason of such declaration, have been cured or have been waived pursuant to Section 17, and (d) no judgment or decree has been entered for the payment of any monies due pursuant hereto or to the Notes.  No rescission and annulment under this Section 12.3 will extend to or affect any subsequent Event of Default or Default or impair any right consequent thereon.

Section 12.4.

No Waivers or Election of Remedies, Expenses, Etc .  No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder’s rights, powers or remedies.  No right, power or remedy conferred by this Agreement, any Subsidiary Guaranty, any Note or any other Transaction Document upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise.  Without limiting the obligations of the Company under Section 15, the Company will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all reasonable and documented out-of-pocket costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, reasonable and documented attorneys’ fees, expenses and disbursements.

SECTION 13.

R EGISTRATION; E XCHANGE; S UBSTITUTION OF N OTES .

Section 13.1.

Registration of Notes .  The Company shall keep at its principal executive office a register for the registration and registration of transfers of Notes.  The name and address of each holder of one or more Notes, each transfer thereof and the name and address of each transferee of one or more Notes shall be registered in such register.  If any holder of one or more Notes is a nominee, then (a) the name and address of the beneficial owner of such Note or Notes



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shall also be registered in such register as an owner and holder thereof and (b) at any such beneficial owner’s option, either such beneficial owner or its nominee may execute any amendment, waiver or consent pursuant to this Agreement.  Prior to due presentment for registration of transfer, the Person(s) in whose name any Note(s) shall be registered shall be deemed and treated as the owner and holder thereof for all purposes hereof, and the Company shall not be affected by any notice or knowledge to the contrary.  The Company shall give to any holder of a Note that is an Institutional Investor promptly upon request therefor, a complete and correct copy of the names and addresses of all registered holders of Notes.

Section 13.2.

Transfer and Exchange of Notes .  Upon surrender of any Note to the Company at the address and to the attention of the designated officer (all as specified in Section 18(iii)), for registration of transfer or exchange (and in the case of a surrender for registration of transfer accompanied by a written instrument of transfer duly executed by the registered holder of such Note or such holder’s attorney duly authorized in writing and accompanied by the relevant name, address and other information for notices of each transferee of such Note or part thereof), within ten Business Days thereafter, the Company shall execute and deliver, at the Company’s expense (except as provided below), one or more new Notes (as requested by the holder thereof) of the same series in exchange therefor, in an aggregate principal amount equal to the unpaid principal amount of the surrendered Note.  Each such new Note shall be payable to such Person as such holder may request and shall be substantially in the form of Schedule 1(a), Schedule 1(b), Schedule 1(c) or Schedule 1(d), as applicable.  Each such new Note shall be dated and bear interest from the date to which interest shall have been paid on the surrendered Note or dated the date of the surrendered Note if no interest shall have been paid thereon.  The Company may require payment of a sum sufficient to cover any stamp tax or governmental charge imposed in respect of any such transfer of Notes.  Notes shall not be transferred in denominations of less than $100,000, provided that if necessary to enable the registration of transfer by a holder of its entire holding of Notes of a series, one Note of such series may be in a denomination of less than $100,000.  So long as no Default or Event of Default shall have occurred and be continuing, in no event may any Purchaser or holder of a Note transfer any Note to a Competitor.  In determining whether any proposed transferee is a Competitor, a Purchaser or other holder of Notes may conclusively rely in good faith on a certificate from such transferee as to whether such Person is a Competitor.  Any transferee, by its acceptance of a Note registered in its name (or the name of its nominee), shall be deemed to have made the representations set forth in Sections 6.1 and 6.2.   

Section 13.3.

Replacement of Notes .  Upon receipt by the Company at the address and to the attention of the designated officer (all as specified in Section 18(iii)) of evidence reasonably satisfactory to it of the ownership of and the loss, theft, destruction or mutilation of any Note (which evidence shall be, in the case of an Institutional Investor, notice from such Institutional Investor of such ownership and such loss, theft, destruction or mutilation), and

(a)

in the case of loss, theft or destruction, of indemnity reasonably satisfactory to it (provided that if the holder of such Note is, or is a nominee for, an original Purchaser or another holder of a Note with a minimum net worth of at least $50,000,000 or a Qualified Institutional Buyer, such Person’s own unsecured agreement of indemnity shall be deemed to be satisfactory), or



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(b)

in the case of mutilation, upon surrender and cancellation thereof,

within ten Business Days thereafter, the Company at its own expense shall execute and deliver, in lieu thereof, a new Note, dated and bearing interest from the date to which interest shall have been paid on such lost, stolen, destroyed or mutilated Note or dated the date of such lost, stolen, destroyed or mutilated Note if no interest shall have been paid thereon.

SECTION 14.

P AYMENTS ON N OTES .

Section 14.1.

Place of Payment .  Subject to Section 14.2, payments of principal, Make-Whole Amount, if any, and interest becoming due and payable on the Notes shall be made in New York, New York at the principal office of Wells Fargo Bank, National Association in such jurisdiction.  The Company may at any time, by notice to each holder of a Note, change the place of payment of the Notes so long as such place of payment shall be either the principal office of the Company in such jurisdiction or the principal office of a bank or trust company in such jurisdiction.

Section 14.2.

Home Office Payment .  So long as any Purchaser or its nominee shall be the holder of any Note, and notwithstanding anything contained in Section 14.1 or in such Note to the contrary, the Company will pay all sums becoming due on such Note for principal, Make-Whole Amount, if any, interest, Excess Leverage Fee and all other amounts becoming due hereunder by the method and at the address specified for such purpose below such Purchaser’s name in Schedule B, or by such other method or at such other address as such Purchaser shall have from time to time specified to the Company in writing for such purpose, without the presentation or surrender of such Note or the making of any notation thereon, except that upon written request of the Company made concurrently with or reasonably promptly after payment or prepayment in full of any Note, such Purchaser shall surrender such Note for cancellation, reasonably promptly after any such request, to the Company at its principal executive office or at the place of payment most recently designated by the Company pursuant to Section 14.1.  Prior to any sale or other disposition of any Note held by a Purchaser or its nominee, such Purchaser will, at its election, either endorse thereon the amount of principal paid thereon and the last date to which interest has been paid thereon or surrender such Note to the Company in exchange for a new Note or Notes pursuant to Section 13.2.  The Company will afford the benefits of this Section 14.2 to any Institutional Investor that is the direct or indirect transferee of any Note purchased by a Purchaser under this Agreement and that has made the same agreement relating to such Note as the Purchasers have made in this Section 14.2.

SECTION 15.

E XPENSES, E TC.

Section 15.1.

Transaction Expenses .  Whether or not the transactions contemplated hereby are consummated, the Company will pay all reasonable and documented out-of-pocket costs and expenses (including reasonable and documented attorneys’ fees of a special counsel (one acting on behalf of all the Purchasers and the holders of the Notes unless there is a conflict preventing one counsel from representing all the Purchasers and such holders) and, if reasonably required by the Required Holders, local or other counsel (one for each applicable jurisdiction or specialty acting on behalf of all the Purchasers and the holders of the Notes unless there is a conflict preventing one counsel from representing all the Purchasers and such holders)) incurred



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by the Purchasers and each other holder of a Note in connection with such transactions and in connection with any amendments, waivers or consents under or in respect of this Agreement, any Subsidiary Guaranty, the Notes or the other Transaction Documents (whether or not such amendment, waiver or consent becomes effective), including, without limitation: (a) the reasonable and documented out-of-pocket costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend or cause the Collateral Agent to enforce or defend) any rights under this Agreement, any Subsidiary Guaranty, the Notes or the other Transaction Documents (including, without limitation, to protect, collect, lease, sell, take possession of, release or liquidate any of the Collateral) or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement, any Subsidiary Guaranty, the Notes or the other Transaction Documents, or by reason of being a holder of any Note, (b) the reasonable and documented out-of-pocket costs and expenses, including financial advisors’ fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby, by the Notes, by any Subsidiary Guaranty and by the other Transaction Documents, (c) all costs and expenses for which a holder of Notes is required to indemnify or reimburse the Collateral Agent pursuant to the Intercreditor Agreement, (d) all reasonable and documented out-of-pocket costs and expenses, including without limitation reasonable and documented attorneys’ fees, preparing, recording and filing all financing statements, instruments and other documents to create, perfect and fully preserve and protect the Liens granted in the Transaction Documents and the rights of the holders of the Notes or of the Collateral Agent for the benefit of the holders of the Notes; and (e) the reasonable and documented out-of-pocket costs and expenses incurred in connection with the initial filing of this Agreement and all related documents and financial information with the SVO provided, that such costs and expenses under this clause (e) shall not exceed $7,500.  The Company will pay, and will save each Purchaser and each other holder of a Note harmless from, (i) all claims in respect of any fees, costs or expenses, if any, of brokers and finders (other than those, if any, retained by a Purchaser or other holder in connection with its purchase of the Notes) in connection with the issuance and sale of the Notes by the Company on the Closing Date and (ii) any and all wire transfer fees that any bank deducts from any payment under such Note to such holder or otherwise charges to a holder of a Note with respect to a payment under such Note.

Section 15.2.

Survival .  The obligations of the Company under this Section 15 will survive the payment or transfer of any Note, the enforcement, amendment or waiver of any provision of this Agreement, any Subsidiary Guaranty or the Notes, and the termination of this Agreement.

SECTION 16.

S URVIVAL OF R EPRESENTATIONS AND W ARRANTIES; E NTIRE A GREEMENT .

All representations and warranties contained herein shall survive the execution and delivery of this Agreement and the Notes, the purchase or transfer by any Purchaser of any Note or portion thereof or interest therein and the payment of any Note, and may be relied upon by any subsequent holder of a Note, regardless of any investigation made at any time by or on behalf of such Purchaser or any other holder of a Note.  All statements contained in any certificate or other instrument delivered by or on behalf of the Company pursuant to this Agreement shall be deemed representations and warranties of the Company under this



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Agreement.  Subject to the preceding sentence, this Agreement, the Notes, any Subsidiary Guaranties and the other Transaction Documents embody the entire agreement and understanding between each Purchaser and the Company and supersede all prior agreements and understandings relating to the subject matter hereof.

SECTION 17.

A MENDMENT AND W AIVER .  

Section 17.1.

Requirements .  This Agreement and the Notes may be amended, and the observance of any term hereof or of the Notes may be waived (either retroactively or prospectively), only with the written consent of the Company and the Required Holders, except that:

(a)

no amendment or waiver of any of Sections 1, 2, 3, 4, 5, 6 or 21 hereof, or any defined term (as it is used therein), will be effective as to any Purchaser unless consented to by such Purchaser in writing;

(b)

no amendment or waiver may, without the written consent of each Purchaser and the holder of each Note at the time outstanding, (i) subject to Section 12 relating to acceleration or rescission, change the amount or time of any prepayment or payment of principal of, or reduce the rate or change the time of payment or method of computation of (x) interest or Excess Leverage Fee on the Notes or (y) the Make-Whole Amount, (ii) change the percentage of the principal amount of the Notes the holders of which are required to consent to any amendment or waiver, or (iii) amend any of Sections 8 (except as set forth in the second sentence of Section 8.2 and Section 17.1(c)), 11(a), 11(b), 12, 17 or 20; provided, that only the consent of the Required Holders shall be necessary to waive any obligation of the Company to pay interest at the Default Rate during the continuance of an Event of Default; and

(c)

Section 8.5 may be amended or waived to permit offers to purchase made by the Company or an Affiliate pro rata to the holders of all Notes at the time outstanding upon the same terms and conditions only with the written consent of the Company and the Required Holders.

Section 17.2.

Solicitation of Holders of Notes .

(a)

Solicitation.  The Company will provide each holder of a Note with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof, of the Notes, of any Subsidiary Guaranty or of any other Transaction Document.  The Company will deliver executed or true and correct copies of each amendment, waiver or consent effected pursuant to this Section 17, any Subsidiary Guaranty or any other Transaction Document to each holder of a Note promptly following the date on which it is executed and delivered by, or receives the consent or approval of, the requisite holders of Notes.

(b)

Payment.  The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or



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otherwise, or grant any security or provide other credit support, to any holder of a Note as consideration for or as an inducement to the entering into by such holder of any waiver or amendment of any of the terms and provisions hereof or of any Subsidiary Guaranty, of any Note or of any other Transaction Document unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each holder of a Note even if such holder did not consent to such waiver or amendment.

(c)

Consent in Contemplation of Transfer .  Any consent given pursuant to this Section 17, any Subsidiary Guaranty or any other Transaction Document by a holder of a Note that has transferred or has agreed to transfer its Note to the Company, any Subsidiary or any Affiliate of the Company (either pursuant to a waiver under Section 17.1(c) or subsequent to Section 8.5 having been amended pursuant to Section 17.1(c)) in connection with such consent shall be void and of no force or effect except solely as to such holder, and any amendments effected or waivers granted or to be effected or granted that would not have been or would not be so effected or granted but for such consent (and the consents of all other holders of Notes that were acquired under the same or similar conditions) shall be void and of no force or effect except solely as to such holder.

Section 17.3.

Binding Effect, Etc .  Any amendment or waiver consented to as provided in this Section 17, in any Subsidiary Guaranty or in any other Transaction Document applies equally to all holders of Notes and is binding upon them and upon each future holder of any Note and upon the Company without regard to whether such Note has been marked to indicate such amendment or waiver.  No such amendment or waiver will extend to or affect any obligation, covenant, agreement, Default or Event of Default not expressly amended or waived or impair any right consequent thereon.  No course of dealing between the Company and any holder of a Note and no delay in exercising any rights hereunder or under any Note, Subsidiary Guaranty or other Transaction Document shall operate as a waiver of any rights of any holder of such Note.

Section 17.4.

Notes Held by Company, Etc .  Solely for the purpose of determining whether the holders of the requisite percentage of the aggregate principal amount of Notes then outstanding approved or consented to any amendment, waiver or consent to be given under this Agreement, any Subsidiary Guaranty, the Notes or any other Transaction Document, or have directed the taking of any action provided herein or in any Subsidiary Guaranty, the Notes or any other Transaction Document to be taken upon the direction of the holders of a specified percentage of the aggregate principal amount of Notes then outstanding, Notes directly or indirectly owned by the Company or any of its Affiliates shall be deemed not to be outstanding.

SECTION 18.

N OTICES .

Except to the extent otherwise provided in Section 7.2, all notices and communications provided for hereunder shall be in writing and sent (a) by telecopy if the sender on the same day sends a confirming copy of such notice by an internationally recognized overnight delivery service (charges prepaid), or (b) by registered or certified mail with return receipt requested (postage prepaid), or (c) by an internationally recognized overnight delivery service (with charges prepaid).  Any such notice must be sent:



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(i)

if to any Purchaser or its nominee, to such Purchaser or nominee at the address specified for such communications in Schedule B, or at such other address as such Purchaser or nominee shall have specified to the Company in writing,

(ii)

if to any other holder of any Note, to such holder at such address as such other holder shall have specified to the Company in writing, or

(iii)

if to the Company, to the Company at its address set forth at the beginning hereof to the attention of Paul A. Styer, General Counsel, facsimile: (972) 386-6736, with a copy to the Company at its address set forth at the beginning hereof to the attention of Zachary Stenzler, Treasury, facsimile: (972) 386-6736, or at such other address as the Company shall have specified to the holder of each Note in writing.

Notices under this Section 18 will be deemed given only when actually received.

SECTION 19.

R EPRODUCTION OF D OCUMENTS .

This Agreement and all documents relating thereto, including, without limitation, (a) consents, waivers and modifications that may hereafter be executed, (b) documents received by any Purchaser at the Closing (except the Notes themselves), and (c) financial statements, certificates and other information previously or hereafter furnished to any Purchaser, may be reproduced by such Purchaser by any photographic, photostatic, electronic, digital, or other similar process and such Purchaser may destroy any original document so reproduced.  The Company agrees and stipulates that, to the extent permitted by applicable law, any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such reproduction was made by such Purchaser in the regular course of business) and any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence.  This Section 19 shall not prohibit the Company or any other holder of Notes from contesting any such reproduction to the same extent that it could contest the original, or from introducing evidence to demonstrate the inaccuracy of any such reproduction.

SECTION 20.

C ONFIDENTIAL I NFORMATION.

For the purposes of this Section 20, “Confidential Information” means information delivered to any Purchaser by or on behalf of the Company or any Subsidiary in connection with the transactions contemplated by or otherwise pursuant to this Agreement or any other Transaction Document that is proprietary in nature and that was clearly marked or labeled or otherwise adequately identified when received by such Purchaser as being confidential information of the Company or such Subsidiary, provided that such term does not include information that (a) was publicly known or otherwise known to such Purchaser on a non-confidential basis prior to the time of such disclosure, (b) subsequently becomes publicly known through no act or omission by such Purchaser or any Person acting on such Purchaser’s behalf, (c) otherwise becomes known to such Purchaser other than through disclosure by the Company or any Subsidiary from a third party that is not, to such Purchaser’s actual knowledge, subject to confidentiality obligations to the Company or any Subsidiary or (d) constitutes financial statements delivered to such Purchaser under Section 7.1 that are otherwise publicly available.  Each Purchaser will maintain the confidentiality of such Confidential Information in accordance



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with procedures adopted by such Purchaser in good faith to protect confidential information of third parties delivered to such Purchaser, provided that such Purchaser may deliver or disclose Confidential Information to (i) its directors, officers, employees, agents, attorneys, trustees and affiliates (to the extent such disclosure reasonably relates to the administration of the investment represented by its Notes), (ii) its auditors, financial advisors and other professional advisors who agree to hold confidential the Confidential Information substantially in accordance with this Section 20, (iii) any other holder of any Note or other security of a Transaction Party, (iv) any Institutional Investor to which it sells or offers to sell such Note or any part thereof or any participation therein (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by this Section 20), (v) any Person from which it offers to purchase any Security of the Company (if such Person has agreed in writing prior to its receipt of such Confidential Information to be bound by this Section 20), (vi) any federal or state regulatory authority having jurisdiction over such Purchaser, (vii) the NAIC or the SVO or, in each case, any similar organization, or any nationally recognized rating agency that requires access to information about such Purchaser’s investment portfolio, or (viii) any other Person to which such delivery or disclosure may be necessary or appropriate (w) to effect compliance with any law, rule, regulation or order applicable to such Purchaser, (x) in response to any subpoena or other legal process (and, subject to clause (z) below, if not prohibited by Applicable Law, such Purchaser shall use commercially reasonable efforts to inform the Company promptly of such disclosure), (y) in connection with any litigation to which such Purchaser is a party (and, subject to clause (z) below, if not prohibited by Applicable Law, such Purchaser shall use commercially reasonable efforts to inform the Company promptly of such disclosure) or (z) if an Event of Default has occurred and is continuing, to the extent such Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser’s Notes, this Agreement, any Subsidiary Guaranty or any other Transaction Document.  Each holder of a Note, by its acceptance of a Note, will be deemed to have agreed to be bound by and to be entitled to the benefits of this Section 20 as though it were a party to this Agreement.  On reasonable request by the Company in connection with the delivery to any holder of a Note of information required to be delivered to such holder under this Agreement or requested by such holder (other than a holder that is a party to this Agreement or its nominee), such holder will enter into an agreement with the Company embodying this Section 20.

In the event that as a condition to receiving access to information relating to the Company or its Subsidiaries in connection with the transactions contemplated by or otherwise pursuant to this Agreement, any Purchaser or holder of a Note is required to agree to a confidentiality undertaking (whether through IntraLinks, another secure website, a secure virtual workspace or otherwise) which is different from this Section 20, this Section 20 shall not be amended thereby and, as between such Purchaser or such holder and the Company, this Section 20 shall supersede any such other confidentiality undertaking.

SECTION 21.

S UBSTITUTION OF P URCHASER .

Each Purchaser shall have the right to substitute any one of its Affiliates or another Purchaser or any one of such other Purchaser’s Affiliates (a “Substitute Purchaser” ) as the purchaser of the Notes that it has agreed to purchase hereunder, by written notice to the Company, which notice shall be signed by both such Purchaser and such Substitute Purchaser,



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shall contain such Substitute Purchaser’s agreement to be bound by this Agreement and shall contain a confirmation by such Substitute Purchaser of the accuracy with respect to it of the representations set forth in Section 6.  Upon receipt of such notice, any reference to such Purchaser in this Agreement (other than in this Section 21), shall be deemed to refer to such Substitute Purchaser in lieu of such original Purchaser.  In the event that such Substitute Purchaser is so substituted as a Purchaser hereunder and such Substitute Purchaser thereafter transfers to such original Purchaser all of the Notes then held by such Substitute Purchaser, upon receipt by the Company of notice of such transfer, any reference to such Substitute Purchaser as a “Purchaser” in this Agreement (other than in this Section 21), shall no longer be deemed to refer to such Substitute Purchaser, but shall refer to such original Purchaser, and such original Purchaser shall again have all the rights of an original holder of the Notes under this Agreement.

SECTION 22.

M ISCELLANEOUS .

Section 22.1.

Successors and Assigns .  All covenants and other agreements contained in this Agreement by or on behalf of any of the parties hereto bind and inure to the benefit of their respective successors and assigns (including, without limitation, any subsequent holder of a Note) whether so expressed or not.

Section 22.2.

Accounting Terms .  

(a)

All accounting terms used herein which are not expressly defined in this Agreement have the meanings respectively given to them in accordance with GAAP.  Except as otherwise specifically provided herein, (i) all computations made pursuant to this Agreement shall be made in accordance with GAAP, and (ii) all financial statements shall be prepared in accordance with GAAP.   For purposes of determining compliance with this Agreement (including, without limitation, Section 9, Section 10 and the definition of “Indebtedness”), (i) any election by the Company to measure any financial liability using fair value (as permitted by Financial Accounting Standards Board Accounting Standards Codification Topic No. 825-10-25 – Fair Value Option, International Accounting Standard 39 – Financial Instruments: Recognition and Measurement or any similar accounting standard) shall be disregarded and such determination shall be made as if such election had not been made and (ii) any obligations arising under a lease that was accounted for by such Person as an operating lease as of the Closing Date and any similar lease entered into after the Closing Date by any Person shall be accounted for as obligations relating to an operating lease and not as a Capital Lease.

(b)

If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Transaction Document, and either the Company or the Required Holders shall so request, the holders of Notes and the Company shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Holders); provided that, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Company shall provide to the holders of Notes financial statements and other documents required under this Agreement or as reasonably requested hereunder setting



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forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.  Without limiting the foregoing, leases shall continue to be classified and accounted for on a basis consistent with that reflected in the Company’s audited financial statements for the fiscal year ended July 31, 2014 for all purposes of this Agreement, notwithstanding any change in GAAP relating thereto, unless the parties hereto shall enter into a mutually acceptable amendment addressing such changes, as provided for above.

Section 22.3.

Severability .  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall (to the full extent permitted by law) not invalidate or render unenforceable such provision in any other jurisdiction.

Section 22.4.

Construction, Etc .  Each covenant contained herein shall be construed (absent express provision to the contrary) as being independent of each other covenant contained herein, so that compliance with any one covenant shall not (absent such an express contrary provision) be deemed to excuse compliance with any other covenant.  Where any provision herein refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person.

Section 22.5.

Counterparts .  This Agreement may be executed in any number of counterparts, each of which shall be an original but all of which together shall constitute one instrument.  Each counterpart may consist of a number of copies hereof, each signed by less than all, but together signed by all, of the parties hereto.

Section 22.6.

Governing Law .  This Agreement shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.

Section 22.7.

Jurisdiction and Process; Waiver of Jury Trial .  

(a)

The Company irrevocably submits to the non-exclusive jurisdiction of any New York State or federal court sitting in the Borough of Manhattan, The City of New York, over any suit, action or proceeding arising out of or relating to this Agreement or the Notes.  To the fullest extent permitted by applicable law, the Company irrevocably waives and agrees not to assert, by way of motion, as a defense or otherwise, any claim that it is not subject to the jurisdiction of any such court, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding brought in any such court and any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum.

(b)

The Company consents to process being served by or on behalf of any holder of Notes in any suit, action or proceeding of the nature referred to in Section 22.7(a) by mailing a copy thereof by registered or certified mail (or any



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substantially similar form of mail), postage prepaid, return receipt requested, to it at its address specified in Section 18 or at such other address of which such holder shall then have been notified pursuant to said Section.  The Company agrees that such service upon receipt (i) shall be deemed in every respect effective service of process upon it in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by applicable law, be taken and held to be valid personal service upon and personal delivery to it.  Notices hereunder shall be conclusively presumed received as evidenced by a delivery receipt furnished by the United States Postal Service or any reputable commercial delivery service.

(c)

Nothing in this Section 22.7 shall affect the right of any holder of a Note to serve process in any manner permitted by law, or limit any right that the holders of any of the Notes may have to bring proceedings against the Company in the courts of any appropriate jurisdiction or to enforce in any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

(d)

T HE PARTIES HERETO HEREBY WAIVE TRIAL BY JURY IN ANY ACTION BROUGHT ON OR WITH RESPECT TO THIS A GREEMENT, THE N OTES OR ANY OTHER DOCUMENT EXECUTED IN CONNECTION HEREWITH OR THEREWITH.

*    *    *    *    *


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If you are in agreement with the foregoing, please sign the form of agreement on a counterpart of this Agreement and return it to the Company, whereupon this Agreement shall become a binding agreement between you and the Company.


 

Very truly yours,

 

 

 

C OPART, I NC.

 

 

 

 

 

By

/s/ William E. Franklin

    Name: William E. Franklin

 

 

Title: Executive Vice President and Chief Financial Officer

 

 

 

 

 

 

 

 

 

 




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This Agreement is hereby

 

accepted and agreed to as

 

of the date hereof.

 

 

METROPOLITAN LIFE INSURANCE
  COMPANY

   
 

FIRST METLIFE INVESTORS INSURANCE
  COMPANY

   

 

By:

Metropolitan Life Insurance Company, its
Investment Manager

     
 

GENERAL AMERICAN LIFE INSURANCE
  COMPANY

   

 

By:

Metropolitan Life Insurance Company, its
Investment Manager

     
 

METLIFE INSURANCE COMPANY USA

   

 

By:

Metropolitan Life Insurance Company, its
Investment Manager

   

 

By

/s/ John A. Wills

    Name: John A. Wills

 

 

Title: Managing Director

 

 

 

 

(Signature Page to Note Purchase Agreement — Copart, Inc.)



 

 

 

 

 

 

 

 

 

 

 

METROPOLITAN LIFE INSURANCE
  COMPANY, on behalf of its Separate
  Account 773

   

 

By:

MetLife Investment Management, LLC, Its
Investment Manager

     
 

METROPOLITAN LIFE INSURANCE
  COMPANY, on behalf of its Separate
  Account 575

   

 

By:

MetLife Investment Management, LLC, Its
Investment Manager

     
 

SYMETRA LIFE INSURANCE COMPANY

   

 

By:

White Mountain Advisors, LLC, as
Investment Manager

     

 

By:

MetLife Investment Management, LLC, Its
Investment Manager

     
 

UNION FIDELITY LIFE INSURANCE
  COMPANY

     

 

By:

MetLife Investment Management, LLC, Its
Investment Manager

   

 

By

/s/ John A. Wills

    Name: John A. Wills

 

 

Title: Managing Director

 

 

 

 

(Signature Page to Note Purchase Agreement — Copart, Inc.)



 

 

 

 

This Agreement is hereby

 

accepted and agreed to as

 

of the date hereof.

 

 

THE PRUDENTIAL INSURANCE COMPANY
  OF AMERICA

   

 

By

/s/ Illegible

    Vice President
   
   
 

THE GIBRALTAR LIFE INSURANCE
  CO., LTD.

   

 

By:

Prudential Investment Management Japan
Co., Ltd., as Investment Manager

     

 

By:

Prudential Investment Management, Inc.
as Sub-Advisor

   

 

By

/s/ Illegible

    Vice President
   
   
 

THE PRUDENTIAL LIFE INSURANCE
  CO. LTD.

   

 

By:

Prudential Investment Management (Japan)
Co., Ltd., as Investment Manager

     

 

By:

Prudential Investment Management, Inc.
as Sub-Advisor

   

 

By

/s/ Illegible

    Vice President
   

 

 

 

 

(Signature Page to Note Purchase Agreement — Copart, Inc.)



 

 

 

 

 

 

 

 

 

 

 

UNITED OF OMAHA LIFE INSURANCE
  COMPANY

     

 

By:

Prudential Private Placement Investors,
L.P. (as Investment Advisor)

     

 

By:

Prudential Private Placement Investors, Inc.
(as its General Partner)

   

 

By

/s/ Illegible

    Vice President
   
   
 

FARMERS INSURANCE EXCHANGE

   

 

By:

Prudential Private Placement Investors,
L.P. (as Investment Advisor)

     

 

By:

Prudential Private Placement Investors, Inc.
(as its General Partner)

   

 

By

/s/ Illegible

    Vice President
   
   
 

MID CENTURY INSURANCE COMPANY

     

 

By:

Prudential Private Placement Investors,
L.P. (as Investment Advisor)

     

 

By:

Prudential Private Placement Investors, Inc.
(as its General Partner)

   

 

By

/s/ Illegible

    Vice President
   

 

 

 

 

(Signature Page to Note Purchase Agreement — Copart, Inc.)



 

 

 

 

 

 

 

 

 

 

 

PRUDENTIAL ARIZONA REINSURANCE,
  TERM COMPANY

   

 

By:

Prudential Investment Management, Inc.,
as investment manager

     

 

By

/s/ Illegible

    Vice President
   
   
 

THE LINCOLN NATIONAL LIFE
  INSURANCE COMPANY

   

 

By:

Prudential Private Placement Investors,
L.P. (as Investment Advisor)

     

 

By:

Prudential Private Placement Investors, Inc.
(as its General Partner)

   

 

By

/s/ Illegible

    Vice President
   
   
 

ZURICH AMERICA INSURANCE
  COMPANY

   

 

By:

Prudential Private Placement Investors,
L.P. (as Investment Advisor)

     

 

By:

Prudential Private Placement Investors, Inc.
(as its General Partner)

   

 

By

/s/ Illegible

    Vice President
   

 

 

 

 

(Signature Page to Note Purchase Agreement — Copart, Inc.)



 

 

 

 

 

 

 

 

 

 

 

FARMERS NEW WORLD LIFE INSURANCE
  COMPANY

   

 

By:

Prudential Private Placement Investors,
L.P. (as Investment Advisor)

     

 

By:

Prudential Private Placement Investors, Inc.
(as its General Partner)

     

 

By

/s/ Illegible

    Vice President
   
   
   
   

 

 

 

 

(Signature Page to Note Purchase Agreement — Copart, Inc.)



D EFINED T ERMS


As used herein, the following terms have the respective meanings set forth below or set forth in the Section hereof following such term:

“Acquisition” shall have the meaning set forth in the definition of “Permitted Acquisition”.

“Additional Covenant” shall mean any affirmative or negative covenant or similar restriction applicable to the Company or any Subsidiary (regardless of whether such provision is labeled or otherwise characterized as a covenant) the subject matter of which either (a) is similar to that of any covenant in Section 9 or Section 10 of this Agreement, or related definitions in Schedule A to this Agreement, but contains one or more percentages, amounts or formulas that is more restrictive than those set forth herein or more beneficial to the holders of any Indebtedness (other than the Notes) of the Company or any Subsidiary (and such covenant or similar restriction shall be deemed an Additional Covenant only to the extent that it is more restrictive or more beneficial) or (ii) is different from the subject matter of any covenants in Section 9 or Section 10 of this Agreement, or related definitions in Schedule A to this Agreement.

“Additional Default” shall mean any provision contained in any agreement evidencing any Indebtedness (other than the Notes) of the Company or any Subsidiary or any agreement for the refinancing or extension of all or a portion of the Indebtedness thereunder which permits the holders of such Indebtedness to accelerate (with the passage of time or giving of notice or both) the maturity thereof or otherwise requires the Company or any Subsidiary to purchase such Indebtedness prior to the stated maturity thereof and which either (i) is similar to any Default or Event of Default contained in Section 11 of this Agreement, or related definitions in Schedule A to this Agreement, but contains one or more percentages, amounts or formulas that is more restrictive or has a shorter grace period than those set forth herein or is more beneficial to the holders of such Indebtedness (and such provision shall be deemed an Additional Default only to the extent that it is more restrictive, has a shorter grace period or is more beneficial) or (ii) is different from the subject matter of any Default or Event of Default contained in Section 11 of this Agreement, or related definitions in Schedule A to this Agreement.

“Additional Pari Passu Debt” means any Indebtedness incurred by any Transaction Party so long as (a) such Indebtedness is secured equally and ratably by the Collateral and the holders of such Indebtedness or a collateral agent for such holders shall have become parties to the Intercreditor Agreement as “Additional Pari Passu Lenders” in accordance with the terms thereof, (b) the representations, covenants and events of default in respect of such Indebtedness shall be no more restrictive (taken as a whole) on the applicable Transaction Party than the representations, covenants and Events of Default contained in this Agreement (as determined by the Company in good faith), (c) the final maturity date of such Indebtedness shall be no earlier than December 3, 2019 and (d) such Indebtedness shall constitute Additional Pari Passu Debt (under and as defined in the Credit Agreement (as in effect of the Closing Date)).



S CHEDULE A
(to Note Purchase Agreement)



“Additional Pari Passu Debt Agreement” means any credit agreement, note purchase agreement or similar agreement entered into by the Company in connection with any Additional Pari Passu Debt.

“Affiliate” means, at any time, and with respect to any Person, any other Person that at such time directly or indirectly through one or more intermediaries Controls, or is Controlled by, or is under common Control with, such first Person.  As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise. Unless the context otherwise clearly requires, any reference to an “Affiliate” is a reference to an Affiliate of the Company.

“Agreement” means this Agreement, including all Schedules attached to this Agreement, as it may be amended, restated, supplemented or otherwise modified from time to time.

“Anti-Corruption Laws” means any law or regulation in a U.S. or any non-U.S. jurisdiction regarding bribery or any other corrupt activity, including the U.S. Foreign Corrupt Practices Act and the U.K. Bribery Act 2010.

“Anti-Money Laundering Laws” means any law or regulation in a U.S. or any non-U.S. jurisdiction regarding money laundering, drug trafficking, terrorist-related activities or other money laundering predicate crimes, including the Currency and Foreign Transactions Reporting Act of 1970 (otherwise known as the Bank Secrecy Act) and the USA PATRIOT Act.

“Applicable Law” means all applicable provisions of constitutions, laws, statutes, ordinances, rules, treaties, regulations, permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities and all orders and decrees of all courts and arbitrators.

“Asset Disposition” means the sale, transfer, license, lease or other disposition of any Property (including any disposition by any Person of Equity Interests of another Person) by any Transaction Party or any Subsidiary thereof, and any issuance of Equity Interests by any Subsidiary of the Company to any Person that is not a Transaction Party or any Subsidiary thereof or that constitute directors’ qualifying shares or other shares required by Applicable Law to be owned by a Person other than the Company and/or one or more of its Wholly-Owned Subsidiaries.  The term “Asset Disposition” shall not include (a) the sale of inventory in the ordinary course of business, (b) sales of non-core assets in connection with a transaction permitted by Section 10.3, (c) the transfer of assets pursuant to any other transaction permitted pursuant to Section 10.4, (d) the write-off, discount, sale or other disposition of defaulted or past-due receivables and similar obligations in the ordinary course of business and not undertaken as part of an accounts receivable financing transaction, (e) the disposition of any Hedge Agreement, (f) dispositions of Investments in cash and Cash Equivalents, (g) the transfer by any Transaction Party of its assets to any other Transaction Party, (h) the transfer by any Non-Guarantor Subsidiary of its assets to any Transaction Party ( provided that in connection with any new transfer, such Transaction Party shall not pay more than an amount equal to the fair market value of such assets as determined in good faith at the time of such transfer), (i) the transfer by any Non-Guarantor Subsidiary of its assets to any other Non-Guarantor Subsidiary (j) the granting, creation or existence of a Permitted Lien, (k) the surrender or waiver of contract rights or



A-2



litigation claims or the settlement, release or surrender of tort or litigation claims of any kind, (l) the transfer of improvements or alterations in connection with any lease of property upon the termination thereof, (m) the abandonment, lapse, or transfer of any domain name, trademark or other intellectual property right that is not material to the business of the Company and its Subsidiaries, taken as a whole, (n) any Restricted Payment permitted by Section 10.6, (o) any Investment permitted by Section 10.3, (p) any sale, transfer, license, lease or other disposition of any Property (in one transaction or a series of related transactions) with an aggregate fair market value of $5,000,000 or less, (q) foreclosure on assets by reason of eminent domain, (r) sales, transfers or other dispositions of assets acquired pursuant to a Permitted Acquisition that in the judgment of the Company’s management are not necessary or desirable to carry out the Company’s business plans, to the extent binding agreements or letters of intent providing for such sales, transfers or other dispositions are entered into within 12 months after the acquisition of such assets, (s) sales, transfers or other dispositions in respect of joint ventures to the extent required by, or made pursuant to, customary buy/sell arrangements between joint venture parties as set forth in the applicable joint venture agreement or similar arrangement and (t) sales, transfers or other dispositions to any Subsidiary of international rights to the Company’s or any of its Subsidiary’s patents, trademarks, copyrights, trade secrets or other intellectual property rights.

“Attributable Indebtedness” means, on any date of determination, (a) in respect of any Capital Lease of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease, the capitalized amount or principal amount of the remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capital Lease.

“Available Amount” means, on any date of determination, an aggregate amount equal to the sum of (a) $200,000,000 plus (b) 50% of cumulative Excess Cash Flow of the Company and its Subsidiaries for each fiscal quarter (beginning with the fiscal quarter ended January 31, 2015) minus (c) the amount of any Investments and Restricted Payments made using the Available Amount.

“Bank Agent” means Wells Fargo Bank, National Association, as agent for the lenders under the Credit Agreement, and its successors and assigns in that capacity.

“ Blocked Person ” means (i) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by OFAC, (ii) a Person, entity, organization, country or regime that is blocked or a target of sanctions that have been imposed under U.S. Economic Sanctions Laws or (iii) a Person that is an agent, department or instrumentality of, or is otherwise beneficially owned by, controlled by or acting on behalf of, directly or indirectly, any Person, entity, organization, country or regime described in clause (i) or (ii).

“Business Day” means (a) for the purposes of Section 8.8 only, any day other than a Saturday, a Sunday or a day on which commercial banks in New York City are required or authorized to be closed, and (b) for the purposes of any other provision of this Agreement, any



A-3



day other than a Saturday, a Sunday or a day on which commercial banks in New York, New York or Dallas, Texas are required or authorized to be closed.

“Capital Expenditures” means, with respect to the Company and its Subsidiaries on a Consolidated basis, for any period, the additions to property, plant and equipment and other capital expenditures that are (or would be) set forth in a consolidated statement of cash flows of such Person for such period prepared in accordance with GAAP, but excluding expenditures for the restoration, repair or replacement of any fixed or capital asset which was destroyed or damaged, in whole or in part, to the extent financed by the proceeds of an insurance policy maintained by such Person.

“Capital Lease” means any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP.

“Capital Lease Obligations” of any Person means the obligations of such Person to pay rent or other amounts under any lease of (or other arrangement conveying the right to use) real or personal property, or a combination thereof, which obligations are required to be classified and accounted for as capital leases on a balance sheet of such Person under GAAP, and the amount of such obligations shall be the capitalized amount thereof determined in accordance with GAAP.

“Cash Collateralized Letters of Credit” means cash collateralized letters of credit (other than letters of credit under the Credit Agreement) or bank guarantees issued by Bank of America, N.A. or Wells Fargo Bank, National Association (or other banks in jurisdictions in which neither Bank of America, N.A., nor Wells Fargo Bank, National Association can issue letters of credit or bank guarantees) issued on behalf of the Company or its Subsidiaries.

“Cash Equivalents” means, collectively, (a) marketable direct obligations issued or unconditionally guaranteed by the United States or any agency thereof maturing within 12 months from the date of acquisition thereof, (b) commercial paper maturing no more than six months from the date of creation thereof and currently having one of the two highest ratings obtainable from either S&P or Moody’s, (c) certificates of deposit maturing no more than six months from the date of creation thereof issued by commercial banks incorporated under the laws of the United States, each having combined capital, surplus and undivided profits of not less than $500,000,000 and having a rating of “A” or better by a nationally recognized rating agency, (d) time deposits maturing no more than 30 days from the date of creation thereof with commercial banks or savings banks or savings and loan associations each having membership either in the FDIC or the deposits of which are insured by the FDIC and in amounts not exceeding the maximum amounts of insurance thereunder, (e) investments, classified in accordance with GAAP as current assets, in money market investment programs registered under the Investment Company Act of 1940 which are administered by reputable financial institutions having capital of at least $500,000,000 and the portfolios of which are limited to Investments of the character described in the foregoing subdivisions (a) through (d), (f) solely in the case of any Foreign Subsidiary, investments, instruments or securities equivalent to those referred to in clauses (a) through (e) of this definition denominated in any foreign currency that is the local currency of such Foreign Subsidiary, and (g) any other investments (whether short term or long



A-4



term) permitted by the Company’s cash investment policy approved by the Company’s board of directors (or a committee thereof) as such policy is in effect, and as disclosed to the Purchasers, prior to the Closing Date (and as amended, restated, supplemented or otherwise modified from time to time, it being understood that any new investments permitted under such policy shall constitute Cash Equivalents for purposes of this Agreement only with the consent (such consent not to be unreasonably withheld) of the Required Holders.

“Cash Management Agreement” means any agreement by a holder of Secured Obligations or Affiliate thereof to provide cash management services, including treasury, depository, overdraft, credit or debit card (including non-card electronic payables), electronic funds transfer and other cash management arrangements.

“Change of Control” means an event or series of events by which:

(a)

any “person” or “group” (as such terms are used in sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such person or its Subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) other than the Permitted Investors becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a “person” or “group” shall be deemed to have “beneficial ownership” of all Equity Interests that such “person” or “group” has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of 35% or more of the Equity Interests of the Company entitled to vote in the election of members of the board of directors (or equivalent governing body) of the Company; or

(b)

there shall have occurred under the Credit Agreement or any indenture or other instrument evidencing the Additional Pari Passu Indebtedness or any other Indebtedness in excess of the Threshold Amount any “change in control” or similar provision (as set forth in the indenture, agreement or other evidence of such Indebtedness), but excluding any “change of control” or similar defined term resulting solely from the failure of the Company’s common stock to be listed or quoted on a national securities exchange, obligating the Company or any of its Subsidiaries to repurchase, redeem or repay all or any part of the Indebtedness provided for therein.

“Change of Control Proposed Prepayment Date” is defined in Section 8.7(c).

“CISADA” means the Comprehensive Iran Sanctions, Accountability and Divestment Act.

“Closing” is defined in Section 3.

“Closing Date” is defined in Section 3.  

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder from time to time.



A-5



“Collateral” means the collateral security for the Secured Obligations pledged or granted pursuant to the Security Documents.

“Collateral Agent” means Wells Fargo Bank, National Association, in its capacity as Collateral Agent under the Intercreditor Agreement and the Security Documents, or any successor Collateral Agent.  

“Company” means Copart, Inc., a Delaware corporation.

“Competitor” means (a) the Persons identified as direct competitors of the Company and its Subsidiaries in a letter provided by the Company to the Purchasers on or prior to the Closing Date; provided that, after the Closing Date, the Company shall be permitted to supplement the list of Persons that are Competitors to the extent the designation of such supplemental Person(s) as a Competitor is reasonably acceptable to the Required Holders by delivering an Officer’s Certificate to each holder of Notes attaching such supplemented list and (b) any other Person who is substantially engaged in the businesses of the Company and its Subsidiaries as of the Closing Date; provided that in no event shall any Person a predominant portion of whose business involves banking, insurance, investment banking, broker/dealer, investment or similar activities (including, without limitation, any Person involved in the life insurance business or in the business of the investment of annuities or contributions to pension, retirement, medical or similar plans or arrangements) be deemed a competitor of the Company.  

“Confidential Information” is defined in Section 20.

“Consolidated” means, when used with reference to financial statements or financial statement items of any Person, such statements or items on a consolidated basis in accordance with applicable principles of consolidation under GAAP.

“Consolidated EBITDA” means, for any period, the sum of the following determined on a Consolidated basis, without duplication, for the Company and its Subsidiaries in accordance with GAAP: (a) Consolidated Net Income for such period plus (b) the sum of the following, without duplication, to the extent deducted in determining Consolidated Net Income for such period: (i) the provision for federal, state, local and foreign income taxes payable by the Company and its Subsidiaries for such period, including, without limitation, any franchise taxes or other taxes based on income, profits or capital and all other taxes that are included in the provision for income tax line item on the consolidated income statement of the Company and its Subsidiaries for such period, (ii) Consolidated Interest Expense, (iii) amortization, depreciation and other non-cash charges or expenses (except to the extent that such non-cash charges are reserved for cash charges to be taken in the future), (iv) extraordinary losses (excluding extraordinary losses from discontinued operations), (v) cash acquisition related expenses, whether or not any acquisition is successful, and cash restructuring, integration and related charges or expenses (which for the avoidance of doubt, include retention, severance, systems establishment costs, contract termination costs, future lease commitments, and costs to consolidate facilities and relocate employees) in an aggregate amount or all add-backs pursuant to this clause (v) not to exceed an amount equal to 4% of Consolidated EBITDA for the period of four consecutive fiscal quarters most recently ended prior to the date of determination for which financial statements have been provided pursuant to this Agreement and (vi) Transaction Costs,



A-6



less (c) the sum of the following, without duplication, to the extent included in determining Consolidated Net Income for such period: (i) interest income, (ii) any extraordinary gains and (iii) non-cash gains or non-cash items increasing Consolidated Net Income.  For purposes of this Agreement, Consolidated EBITDA shall be adjusted on a Pro Forma Basis.

“Consolidated Interest Coverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated EBITDA for the period of four consecutive fiscal quarters ending on or immediately prior to such date to (b) Consolidated Interest Expense for the period of four consecutive fiscal quarters ending on or immediately prior to such date.

“Consolidated Interest Expense” means, for any period, the sum of the following determined on a Consolidated basis, without duplication, for the Company and its Subsidiaries in accordance with GAAP, interest expense (including, without limitation, interest expense attributable to Capital Lease Obligations and all net payment obligations pursuant to Hedge Agreements), premium payments, debt discounts and fees, charges and related expenses incurred in connection with the deferred purchase price of assets, for such period.

“Consolidated Net Income” means, for any period, the net income (or loss) of the Company and its Subsidiaries for such period, determined on a Consolidated basis, without duplication, in accordance with GAAP; provided , that in calculating Consolidated Net Income of the Company and its Subsidiaries for any period, there shall be excluded (a) the net income (or loss) of any Person (other than a Subsidiary which shall be subject to clause (c) below), in which the Company or any of its Subsidiaries has a joint interest with a third party, except to the extent such net income is actually paid in cash to the Company or any of its Subsidiaries by dividend or other distribution during such period, (b) the net income (or loss) of any Person accrued prior to the date it becomes a Subsidiary of the Company or any of its Subsidiaries or is merged into or consolidated with the Company or any of its Subsidiaries or that Person’s assets are acquired by the Company or any of its Subsidiaries except to the extent included pursuant to the foregoing clause (a), (c) the net income (if positive) of any Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such Subsidiary to the Company or any of its Subsidiaries of such net income (i) is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such Subsidiary or (ii) would be subject to any taxes payable on such dividends or distributions, but in each case only to the extent of such prohibition or taxes and (d) any gain or loss from Asset Dispositions during such period.

“Consolidated Total Assets” means, as of any date of determination, with respect to the Company and its Subsidiaries on a Consolidated basis, total assets, as determined in accordance with GAAP applied on a consistent basis.

“Consolidated Total Indebtedness” means, as of any date of determination with respect to the Company and its Subsidiaries on a Consolidated basis without duplication, the sum of the outstanding principal amount of all Indebtedness of the Company and its Subsidiaries described in clauses (a) through (d) and clauses (f), (g) and, solely with respect to the foregoing, clause (i) of the definition of Indebtedness; provided, however, the Cash Collateralized Letters of Credit shall be excluded from this definition so long as they are fully cash collateralized.



A-7



“Consolidated Total Net Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Total Indebtedness on such date minus the sum of (i) 100% of the amount of unrestricted cash and Cash Equivalents on the balance sheet of the Company on such date with respect to the Company and its Domestic Subsidiaries and (ii) 66% of the amount of unrestricted cash and Cash Equivalents on the balance sheet of the Company on such date with respect to its Foreign Subsidiaries to (b) Consolidated EBITDA for the period of four consecutive fiscal quarters ending on or immediately prior to such date.

“Control Event” means the announcement to the public by the Company of the execution by the Company or any of its Affiliates of any written agreement which, when fully performed by the parties thereto, would result in a Change of Control.

“Controlled Entity” means (i) any of the Subsidiaries of the Company and any of their or the Company’s respective Controlled Affiliates and (ii) if the Company has a parent company, such parent company and its Controlled Affiliates. As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Credit Agreement” means the Credit Agreement dated as of December 3, 2014, by and among the Company, the financial institutions party thereto as lenders and the Bank Agent, as amended, restated, supplemented, modified, refinanced or replaced from time to time.

“Debtor Relief Laws” means the Bankruptcy Code of the United States of America, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief laws of the United States or other applicable jurisdictions from time to time in effect.

“Default” means an event or condition the occurrence or existence of which would, with the lapse of time or the giving of notice or both, become an Event of Default.

“Default Rate” means that rate of interest that is the greater of (i) the sum of (a) 2.00% per annum above the rate of interest stated in clause (a) of the first paragraph of the Notes of the applicable series and (b) to the extent the Excess Leverage Fee is then applicable, the Excess Leverage Fee or (ii) 2.00% over the rate of interest publicly announced by Wells Fargo Bank, National Association in New York, New York as its “base” or “prime” rate.

“Disclosure Letter” means the disclosure letter dated as of the date hereof delivered by the Company to the Purchasers.

“Disqualified Equity Interests” means any Equity Interests that, by their terms (or by the terms of any security or other Equity Interest into which they are convertible or for which they are exchangeable) or upon the happening of any event or condition, (a) mature or are mandatorily redeemable (other than solely for Qualified Equity Interests), pursuant to a sinking fund obligation or otherwise (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Notes and all other Obligations that are accrued and payable), (b) are redeemable at the option of the holder thereof (other than solely for



A-8



Qualified Equity Interests) (except as a result of a change of control or asset sale so long as any rights of the holders thereof upon the occurrence of a change of control or asset sale event shall be subject to the prior repayment in full of the Notes and all other Obligations that are accrued and payable), in whole or in part, (c) provide for the scheduled payment of dividends in cash or (d) are or become convertible into or exchangeable for Indebtedness or any other Equity Interests that would constitute Disqualified Equity Interests, in each case, prior to the date that is 91 days after the latest Maturity Date applicable to the Notes; provided that if such Equity Interests is issued pursuant to a plan for the benefit of the Company or its Subsidiaries or by any such plan to such employees, such Equity Interests shall not constitute Disqualified Equity Interests solely because they may be required to be repurchased by the Company or its Subsidiaries in order to satisfy applicable statutory or regulatory obligations.

“Dollars” or “$” means, unless otherwise qualified, dollars in lawful currency of the United States.

“Domestic Subsidiary” means any Subsidiary organized under the laws of any political subdivision of the United States.

“EDGAR” means the SEC’s Electronic Data Gathering, Analysis and Retrieval System or any successor SEC electronic filing system for such purposes.

“Environmental Claims” means any and all administrative, regulatory or judicial actions, suits, demands, demand letters, claims, liens, accusations, allegations, notices of noncompliance or violation, investigations (other than internal reports prepared by any Person in the ordinary course of business and not in response to any third party action or request of any kind) or proceedings relating in any way to any actual or alleged violation of or liability under any Environmental Law or relating to any permit issued, or any approval given, under any such Environmental Law, including, without limitation, any and all claims by Governmental Authorities for enforcement, cleanup, removal, response, remedial or other actions or damages, contribution, indemnification, cost recovery, compensation or injunctive relief resulting from Hazardous Materials or arising from alleged injury or threat of injury to public health or the environment.

“Environmental Laws” means any and all federal, foreign, state, provincial and local laws, statutes, ordinances, codes, rules, standards and regulations, permits, licenses, approvals, interpretations and orders of courts or Governmental Authorities, relating to the protection of public health or the environment, including, but not limited to, requirements pertaining to the manufacture, processing, distribution, use, treatment, storage, disposal, transportation, handling, reporting, licensing, permitting, investigation or remediation of Hazardous Materials.

“Equity Interests” means (a) in the case of a corporation, capital stock, (b) in the case of an association or business entity, any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (c) in the case of a partnership, partnership interests (whether general or limited), (d) in the case of a limited liability company, membership interests, (e) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person and (f) any and all warrants, rights or options to purchase any of the foregoing.



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“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.

“ERISA Affiliate” means any trade or business (whether or not incorporated) that is treated as a single employer together with the Company under section 414 of the Code.

“Event of Default” is defined in Section 11.

“Excess Cash Flow” means, for the Company and its Subsidiaries on a Consolidated basis, in accordance with GAAP for any Fiscal Year:

(a)

the sum, without duplication, of (i) Consolidated Net Income for such Fiscal Year, (ii) an amount equal to the amount of all non-cash charges to the extent deducted in determining Consolidated Net Income for such Fiscal Year and (iii) decreases in Working Capital for such Fiscal Year, minus

(b)

the sum, without duplication, of (i) the aggregate amount of cash (A) actually paid by the Company and its Subsidiaries during such Fiscal Year on account of Capital Expenditures and Permitted Acquisitions (other than any amounts that were committed during a prior Fiscal Year to the extent such amounts reduced Excess Cash Flow in such prior Fiscal Year per clause (b)(i)(B) below) and, (B) committed during such Fiscal Year to be used to make Capital Expenditures or Permitted Acquisitions which in either case have been actually made or consummated or for which a binding agreement exists as of the time of determination of Excess Cash Flow for such Fiscal Year (in each case under this clause (i) other than to the extent any such Capital Expenditure, Permitted Acquisition or other Investment is made or is expected to be made with the proceeds of Indebtedness, any Equity Issuance, casualty proceeds, condemnation proceeds or other proceeds that would not be included in Consolidated EBITDA), (ii) the aggregate amount of all scheduled principal payments or repayments of Indebtedness (other than mandatory prepayments of loans under the Credit Agreement) made by the Company and its Subsidiaries during such Fiscal Year, but only to the extent that such payments or repayments by their terms cannot be reborrowed or redrawn and do not occur in connection with a refinancing of all or any portion of such Indebtedness, (iii) voluntary principal prepayments of the term loan (under the Credit Agreement), the Notes and voluntary prepayments or repayments of revolving loans (under the Credit Agreement) to the extent that the Revolving Credit Commitment (as defined in the Credit Agreement) is permanently reduced by an equal amount at the time of such payment or prepayment, (iv) an amount equal to the amount of all non-cash credits to the extent included in determining Consolidated Net Income for such Fiscal Year and (v) increases to Working Capital for such Fiscal Year.

“Excess Leverage Fee” is defined in Section 9.9.

“Excess Proceeds Prepayment Date” is defined in Section 8.6(b).

“Excess Proceeds Prepayment Event” is defined in Section 8.6(b).



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“Exchange Act” means the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder.

“Excluded Subsidiary” means (a) each Domestic Subsidiary that is an Immaterial Subsidiary as of the Closing Date and listed on Schedule 9.7(a) to the Disclosure Letter and each future Domestic Subsidiary which is an Immaterial Subsidiary, in each case, for so long as such Subsidiary remains an Immaterial Subsidiary, (b) any Subsidiary substantially all of the assets of which consist of Equity Interests of Foreign Subsidiaries (a “FSHCO” ), (c) each Subsidiary that is a Subsidiary of a Foreign Subsidiary, (d) any Person where a Guarantee is prohibited or restricted by contracts (so long as such contract or replacement or renewal thereof is in effect) with an unaffiliated third party existing on the Closing Date or at the time of the acquisition of such Subsidiary and not entered into in contemplation thereof or Applicable Law (including any requirement to obtain Governmental Authority or third party consent), rule or regulation or would result in material adverse tax consequences as reasonably determined by the Company in consultation with the holders of Notes, (e) any special purpose entity, (f) any Foreign Subsidiary other than any Foreign Subsidiary owned directly by a Transaction Party if such Foreign Subsidiary (i) is disregarded for U.S. federal income tax purposes and (ii) is not a FSHCO or (g) any other Domestic Subsidiaries to the extent the Required Holder(s) and Company mutually determine that the cost and/or burden of obtaining the Guarantee outweigh the benefit to holders of Notes.

“Existing Credit Agreement” means that certain Credit Agreement, dated as of December 14, 2010, between Copart, Inc. and Bank of America, N.A., as amended, restated, amended and restated or otherwise modified from time to time.

“First Tier Foreign Subsidiary” means any Foreign Subsidiary that is a “controlled foreign corporation” within the meaning of Section 957 of the Code and the Equity Interests of which are owned directly by any Transaction Party.

“Fiscal Year” means the fiscal year of the Company and its Subsidiaries ending on July 31.

“Foreign Subsidiary” means any Subsidiary that is not a Domestic Subsidiary.

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

“Governmental Authority” means

(a)

the government of

(i)

the United States of America or any state or other political subdivision thereof, or



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(ii)

any other jurisdiction in which the Company or any Subsidiary conducts all or any part of its business, or which asserts jurisdiction over any properties of the Company or any Subsidiary, or

(b)

any entity exercising executive, legislative, judicial, regulatory or administrative functions of, or pertaining to, any such government.

“Governmental Official” means any governmental official or employee, employee of any government-owned or government-controlled entity, political party, any official of a political party, candidate for political office, official of any public international organization or anyone else acting in an official capacity.

“Guarantee” of or by any Person (the “guarantor”) means any obligation, contingent or otherwise, of the guarantor guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation of any other Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of the guarantor, direct or indirect, (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation or to purchase (or to advance or supply funds for the purchase of) any security for the payment thereof, (b) to purchase or lease property, securities or services for the purpose of assuring the owner of such Indebtedness or other obligation of the payment thereof, (c) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, (d) as an account party in respect of any letter of credit or letter of guaranty issued to support such Indebtedness or obligation or (e) for the purpose of assuming in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (whether in whole or in part); provided, however, that the term “Guarantee” shall not include any liability by endorsement of instruments for collection or deposit in the ordinary course of business or any customary and reasonable indemnity obligations entered into in the ordinary course of business or in connection with any transaction permitted hereby.  

“Hazardous Materials” means any substances or materials (a) which are or become defined as hazardous wastes, hazardous substances, pollutants, contaminants, chemical substances or mixtures or toxic substances under any Environmental Law, (b) which are toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to public health or the environment and are or become regulated by any Governmental Authority, (c) the presence of which require investigation or remediation under any Environmental Law or common law, (d) the discharge or emission or release of which requires a permit or license under any Environmental Law or other Governmental Approval, (e) which are deemed by a Governmental Authority to constitute a nuisance or a trespass which pose a health or safety hazard to Persons or neighboring properties, or (f) which contain, without limitation, asbestos, polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic gas.

“Hedge Agreement” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options,



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forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement.

“Hedge Termination Value” means, in respect of any one or more Hedge Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Hedge Agreements, (a) for any date on or after the date such Hedge Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Hedge Agreements, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Hedge Agreements.

“holder” means, with respect to any Note, the Person in whose name such Note is registered in the register maintained by the Company pursuant to Section 13.1, provided, however, that if such Person is a nominee, then for the purposes of Sections 7, 12, 17.2 and 18 and any related definitions in this Schedule B, “holder” shall mean the beneficial owner of such Note whose name and address appears in such register.

“Immaterial Subsidiary” means, any Domestic Subsidiary that owns 5% or less of consolidated assets of the Transaction Parties and their Subsidiaries at the end of any fiscal quarter or generates 5% or less of Consolidated EBITDA of the Transaction Parties and their Subsidiaries for any period of four consecutive fiscal quarters, in each case determined by reference to the most recently ended fiscal quarter for which financial statements have been provided by the Company pursuant to this Agreement; provided however, at no time shall all Immaterial Subsidiaries that have not become Subsidiary Guarantors in the aggregate own more than 15% of consolidated assets at the end of any fiscal quarter or generate more than 15% of Consolidated EBITDA of the Transaction Parties and their Subsidiaries for any period of four consecutive fiscal quarters, in each case determined by reference to the most recently ended fiscal quarter for which financial statements have been provided by the Company pursuant to this Agreement.

“INHAM Exemption” is defined in Section 6.2(e).

“Indebtedness” means, with respect to any Person at any date and without duplication, the sum of the following:



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(a)

all liabilities, obligations and indebtedness for borrowed money including, but not limited to, obligations evidenced by bonds, debentures, notes or other similar instruments of any such Person;

(b)

all obligations to pay the deferred purchase price of property or services of any such Person, (i) except trade payables arising in the ordinary course of business not more than 90 days past due, or that are currently being contested in good faith by appropriate proceedings and with respect to which reserves in conformity with GAAP have been provided for on the books of such Person, (ii) intercompany charges of expenses, deferred revenue and other accrued liabilities (including deferred payments in respect of services by employees), in each case incurred in the ordinary course of business, and (iii) any earn-out obligation or other post-closing balance sheet adjustment prior to such time as it becomes a liability on the balance sheet of such Person in accordance with GAAP);

(c)

the Attributable Indebtedness of such Person with respect to such Person’s Capital Lease Obligations and Synthetic Leases (regardless of whether accounted for as indebtedness under GAAP);

(d)

all obligations of such Person under conditional sale or other title retention agreements relating to property purchased by such Person to the extent of the value of such property (other than customary reservations or retentions of title under agreements with suppliers entered into in the ordinary course of business);

(e)

all Indebtedness of any other Person secured by a Lien on any asset owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements except trade payables arising in the ordinary course of business), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(f)

all obligations, contingent or otherwise, of any such Person relative to the face amount of letters of credit, whether or not drawn, and banker’s acceptances issued for the account of any such Person;

(g)

all obligations of any such Person in respect of Disqualified Equity Interests;

(h)

all net obligations of such Person under any Hedge Agreements; and

(i)

all Guarantees of any such Person with respect to any of the foregoing.

For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Indebtedness is expressly made non-recourse to such Person.  The amount of any net obligation under any Hedge Agreement on any date shall be deemed to be the Hedge Termination Value thereof as of such date.



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“Institutional Investor” means (a) any Purchaser of a Note, (b) any holder of a Note holding (together with one or more of its affiliates) more than 5% of the aggregate principal amount of the Notes then outstanding, (c) any bank, trust company, savings and loan association or other financial institution, any pension plan, any investment company, any insurance company, any broker or dealer, or any other similar financial institution or entity, regardless of legal form, and (d) any Related Fund of any holder of any Note.

“Insurance and Condemnation Event” means the receipt by any Transaction Party or any of its Subsidiaries of any cash insurance proceeds or condemnation award payable by reason of theft, loss, physical destruction or damage, taking or similar event with respect to any of their respective Property.

“Intercreditor Agreement” is defined in Section 4.6.  

“Investments” is defined in Section 10.3.

“Lien” means, with respect to any asset, any mortgage, leasehold mortgage, lien, pledge, charge, security interest, hypothecation or encumbrance of any kind in respect of such asset.  For the purposes of this Agreement, a Person shall be deemed to own subject to a Lien any asset which it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, Capital Lease or other title retention agreement relating to such asset.

“Make-Whole Amount” is defined in Section 8.8.

“Material” means material in relation to the business, operations, affairs, financial condition, assets, properties, or prospects of the Company and its Subsidiaries taken as a whole.

“Material Adverse Effect” means, with respect to the Company and its Subsidiaries, (a) a material adverse effect on the operations, business, assets, properties, liabilities (actual or contingent) or condition (financial or otherwise) of such Persons, taken as a whole, (b) a material impairment of the ability of any such Person to perform its obligations under the Transaction Documents to which it is a party, (c) a material impairment of the rights and remedies of the Collateral Agent or any holder of a Note under any Transaction Document or (d) a material adverse effect upon the legality, validity, binding effect or enforceability against any Transaction Party of any Transaction Document to which it is a party.

“Material Contract” means each of the agreements listed as exhibits to the Company’s Annual Report on Form 10-K for the year ended July 31, 2014, included therein pursuant to the requirements of clauses (2), (4), (9) or (10) of Item 601(b) of Regulation S-K promulgated under the Securities Act of 1933 (other than those which have expired, terminated or are otherwise no longer in effect).

“Material Credit Facility” means, as to the Company and its Subsidiaries,

(a)

the Credit Agreement, including any renewals, extensions, amendments, supplements, restatements, replacements or refinancing thereof;



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(b)

each Additional Pari Passu Debt Agreement, including any renewals, extensions, amendments, supplements, restatements, replacements or refinancing thereof; and

(c)

any other agreement(s) creating or evidencing indebtedness for borrowed money entered into on or after the Closing Date by the Company or any Subsidiary, or in respect of which the Company or any Subsidiary is an obligor or otherwise provides a guarantee or other credit support ( “Credit Facility” ), in a principal amount outstanding or available for borrowing equal to or greater than $200,000,000 (or the equivalent of such amount in the relevant currency of payment, determined as of the date of the closing of such facility based on the exchange rate of such other currency) .

“Maturity Date” is defined in the first paragraph of each Note.

“Minimum Liquidity” shall mean, as of any date of determination with respect to the Transaction Parties, unused availability under the Revolving Credit Facility (under and as defined in the Credit Agreement) plus (a) 100% of the amount of unrestricted cash and Cash Equivalents of the Company and its Domestic Subsidiaries and (b) 66 2/3% of the amount of unrestricted cash and Cash Equivalents of the Company’s Foreign Subsidiaries, in each case as of such date.  For the avoidance of doubt, cash shall not be deemed restricted by reason of the existence of (i) Liens granted pursuant to the Security Agreement, (ii) restrictions on the use of cash imposed under this Agreement, the Credit Agreement (other than cash collateral under Section 5.14 of the Credit Agreement) or any Additional Pari Passu Debt Agreement or (iii) common law rights of setoff in favor of depository institutions.

“Moody’s” means Moody’s Investors Service, Inc.

“Multiemployer Plan” means any Plan that is a “multiemployer plan” (as such term is defined in section 4001(a)(3) of ERISA) to which any Transaction Party or any ERISA Affiliate is making, or is accruing an obligation to make, or has accrued an obligation to make contributions within the preceding six years.

“NAIC” means the National Association of Insurance Commissioners or any successor thereto.

“Net Cash Proceeds” means, as applicable, with respect to any Asset Disposition or Insurance and Condemnation Event, the gross proceeds received by any Transaction Party or any of its Subsidiaries therefrom in the form of cash and Cash Equivalents (including such proceeds in the form of any deferred payment pursuant to, or by monetization of, a note receivable or otherwise, as and when received) less the sum of (i) in the case of an Asset Disposition, all income taxes and other taxes assessed by, or reasonably estimated to be payable to, a Governmental Authority as a result of such transaction ( provided that if such estimated taxes exceed the amount of actual taxes required to be paid in cash in respect of such Asset Disposition, the amount of such excess shall constitute Net Cash Proceeds), (ii) all reasonable and customary out-of-pocket fees, costs, commissions and expenses incurred in connection with such transaction or event and (iii) the principal amount of, premium, if any, and interest on any Indebtedness (other than the Secured Obligations) secured by a Lien on the asset (or a portion



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thereof) disposed of, which Indebtedness is required to be repaid in connection with such transaction or event.

“Non-Guarantor Subsidiary” means any Subsidiary of the Company that is not a Subsidiary Guarantor.

“Notes” is defined in Section 1.

“Obligations” means, in each case, whether now in existence or hereafter arising: (a) the principal of, interest on (including interest accruing after the filing of any bankruptcy or similar petition) and any Excess Leverage Fee and Make-Whole Amount on the Notes and (b) all other fees and commissions (including attorneys’ fees), charges, indebtedness, loans, liabilities, financial accommodations, obligations, covenants and duties owing by the Transaction Parties and each of their respective Subsidiaries to the holders of Notes or the Collateral Agent, in each case under any Transaction Document, with respect to any Note of every kind, nature and description, direct or indirect, absolute or contingent, due or to become due, contractual or tortious, liquidated or unliquidated, and whether or not evidenced by any note and including interest and fees that accrue after the commencement by or against any Transaction Party or any Subsidiary thereof of any proceeding under any Debtor Relief Laws, naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

“OFAC” means Office of Foreign Assets Control, United States Department of the Treasury.

“OFAC Sanctions Program” means any economic or trade sanction that OFAC is responsible for administering and enforcing.  A list of OFAC Sanctions Programs may be found at http://www.treasury.gov/resource-center/sanctions/Programs/Pages/Programs.aspx .

“Officer’s Certificate” means a certificate of a Senior Financial Officer or of any other officer of the Company whose responsibilities extend to the subject matter of such certificate.

“Officer’s Compliance Certificate” means a certificate of the chief financial officer or the treasurer of the Company substantially in the form attached as Schedule 7.2(a).

“Operating Lease” means, as to any Person as determined in accordance with GAAP, any lease of Property (whether real, personal or mixed) by such Person as lessee which is not a Capital Lease.

“Pari Passu Lien Indebtedness” means any Indebtedness that is incurred under clauses (i) or (j) or Section 10.1 and any refinancings, renewals, refundings or extensions thereof which are permitted by the terms of this Agreement.

“PBGC” means the Pension Benefit Guaranty Corporation referred to and defined in ERISA or any successor thereto.

“Permitted Acquisition” means any acquisition by the Company or any Subsidiary in the form of the acquisition of all or substantially all of the assets, business or a line of business,



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or at least a majority of the outstanding Equity Interests which have the ordinary voting power for the election of directors of the board of directors (or equivalent governing body) (whether through purchase, merger or otherwise), of any other Person (each, an “Acquisition” ) if each such acquisition meets all of the following requirements:

(a)

such Acquisition has been approved by the board of directors (or equivalent governing body) of the Person to be acquired;

(b)

the Person or business to be acquired shall be in a line of business permitted pursuant to Section 10.11;

(c)

if such transaction is a merger or consolidation involving the Company or a Subsidiary Guarantor, the Company or a Subsidiary Guarantor (or, in the case of a transaction not involving the Company, a Person that will become a Subsidiary Guarantor upon such merger or consolidation) shall be the surviving Person and no Change of Control shall have been effected thereby;

(d)

(i) the Company is in compliance on a Pro Forma Basis (as of the date of the Acquisition and after giving effect thereto and any Indebtedness incurred in connection therewith) with each covenant contained in Section 10.15 and (ii) the Consolidated Total Net Leverage Ratio calculated on a Pro Forma Basis (as of the proposed closing date of the Acquisition and after giving effect thereto and any Indebtedness incurred in connection therewith (but without deduction for cash proceeds of any such Indebtedness)) shall be no greater than 3.25 to 1.00;

(e)

the holders of Notes shall have received, for any such Acquisition with total consideration in excess of $50,000,000, (1) audited financial statements (or, if unavailable, management-prepared financial or pro forma financial statements) of the target for its two most recent fiscal years and for any fiscal quarters ended within the fiscal year to date and (2) an Officer’s Compliance Certificate for the most recent fiscal quarter end preceding such Acquisition for which financial statements are available demonstrating compliance with clause (d) above;

(f)

no Default or Event of Default shall have occurred and be continuing both before and after giving effect to such Acquisition and any Indebtedness incurred in connection therewith; and

(g)

both before and after giving effect to the Acquisition on a Pro Forma Basis, Minimum Liquidity shall be at least $75,000,000.

“Permitted Investors” means, Willis J. Johnson, A. Jayson Adair and their Affiliates, and their respective estate, spouse, siblings, heirs and lineal descendants, and spouses of any such persons, the legal representatives of the foregoing, and the trustee of any bona fide trust of which one or more of the foregoing are the principal beneficiaries or grantors.

“Permitted Liens” means the Liens permitted pursuant to Section 10.2.



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“Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity.

“Plan” means an “employee benefit plan” (as defined in section 3(3) of ERISA) subject to Title I of ERISA that is or, within the preceding five years, has been established or maintained, or to which contributions are or, within the preceding five years, have been made or required to be made, by the Company or any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate may have any liability.

“Pro Forma Basis” means, for purposes of calculating Consolidated EBITDA for any period during which one or more Specified Transactions occurs, that such Specified Transaction (and all other Specified Transactions that have been consummated during the applicable period) shall be deemed to have occurred as of the first day of the applicable period of measurement and (i) all income statement items (whether positive or negative) attributable to the Property or Person disposed of in a Specified Disposition shall be excluded and all income statement items (whether positive or negative) attributable to the Property or Person acquired in a Permitted Acquisition shall be included ( provided that such income statement items to be included are reflected in financial statements or other financial data reasonably acceptable to the Required Holders and based upon reasonable assumptions and calculations which are expected to have a continuous impact) and (ii) with respect to any Indebtedness incurred or assumed in connection with such Specified Transaction, if such Indebtedness has a floating or formula rate, it shall have an implied rate of interest for the applicable period for purposes of this definition determined by utilizing the rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination.

“Property” means any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible, including, without limitation, Equity Interests.

“PTE” is defined in Section 6.2(a).

“Purchaser” or “Purchasers” means each of the purchasers that has executed and delivered this Agreement to the Company and such Purchaser’s successors and assigns (so long as any such assignment complies with Section 13.2), provided, however, that any Purchaser of a Note that ceases to be the registered holder or a beneficial owner (through a nominee) of such Note as the result of a transfer thereof pursuant to Section 13.2 shall cease to be included within the meaning of “Purchaser” of such Note for the purposes of this Agreement upon such transfer.

“Qualified Equity Interests” means any Equity Interests that are not Disqualified Equity Interests.

“Qualified Institutional Buyer” means any Person who is a “qualified institutional buyer” within the meaning of such term as set forth in Rule 144A(a)(1) under the Securities Act.

“QPAM Exemption” is defined in Section 6.2(d).

“Ratable Portion” for any Note shall mean, with respect to any Excess Proceeds, an amount equal to the product of (a) such Excess Proceeds multiplied by (b) a fraction, the



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numerator of which is the aggregate outstanding principal amount of such Note and the denominator of which is the aggregate outstanding principal amount of all Pari Passu Lien Indebtedness at such time requiring a prepayment (or an offer to repay) from a specified Asset Disposition.

“Related Fund” means, with respect to any holder of any Note, any fund or entity that (i) invests in Securities or bank loans, and (ii) is advised or managed by such holder, the same investment advisor as such holder or by an affiliate of such holder or such investment advisor.

“Required Holders” means at any time on or after the Closing, the holders of at least 66 2/3% in principal amount of the Notes at the time outstanding (exclusive of Notes then owned by the Company or any of its Affiliates).

“Responsible Officer” means any Senior Financial Officer and any other officer of the Company with responsibility for the administration of the relevant portion of this Agreement.

“Restricted Payment” has the meaning assigned thereto in Section 10.6.

“S&P” means Standard & Poor’s Financial Services LLC, a part of McGraw-Hill Financial and any successor thereto.

“SEC” means the Securities and Exchange Commission of the United States, or any successor thereto.

“Secured Obligations” means, collectively, (a) the Obligations and (b) all other Senior Indebtedness (as defined in the Intercreditor Agreement).

“Securities” or “Security” shall have the meaning specified in section 2(1) of the Securities Act.

“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.

“Security Agreement” means the security agreement of even date herewith executed by the Company and the Guarantors in favor of the Collateral Agent, for the ratable benefit and the Secured Parties, which shall be in form and substance acceptable to the Required Holders.

“Security Documents” means the collective reference to the Security Agreement and each other agreement or writing pursuant to which any Transaction Party pledges or grants a security interest in any Property or assets securing the Secured Obligations.  

“Senior Financial Officer” means the chief financial officer, principal accounting officer, vice president of finance, treasurer or comptroller of the Company.

“Significant Holder” shall mean (i) each Purchaser, so long as such Purchaser or one of its Affiliates shall hold any Note and (ii) any other Person which, together with its Affiliates, is the holder of at least 10% of the then aggregate outstanding principal amount of the Notes.



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“Solvent” and “Solvency” mean, with respect to any Person on any date of determination, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person, (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured, (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay such debts and liabilities as they mature, (d) such Person is not engaged in business or a transaction, and is not about to engage in business or a transaction, for which such Person’s property would constitute an unreasonably small capital, and (e) such Person is able to pay its debts and liabilities, contingent obligations and other commitments as they mature in the ordinary course of business.  The amount of contingent liabilities at any time shall be computed as the amount that, in the light of all the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“Source” is defined in Section 6.2.

“Specified Disposition” means any disposition of all or substantially all of the assets or Equity Interests of any Subsidiary of the Company or any division, business unit, product line or line of business of the Company or any Subsidiary of the Company.

“Specified Transactions” means (a) any Specified Disposition, (b) any Permitted Acquisition and (c) the Transactions.

“ State Sanctions List ” means a list that is adopted by any state Governmental Authority within the United States of America pertaining to Persons that engage in investment or other commercial activities in Iran or any other country that is a target of economic sanctions imposed under U.S. Economic Sanctions Laws.

“Subordinated Indebtedness” means the collective reference to any Indebtedness incurred by the Company or any of its Subsidiaries that by its terms is expressly subordinated in right and time of payment to the Obligations on terms and conditions satisfactory to the Required Holders.

“Subsidiary” means as to any Person, any corporation, partnership, limited liability company or other entity of which more than 50% of the outstanding Equity Interests having ordinary voting power to elect a majority of the board of directors (or equivalent governing body) or other managers of such corporation, partnership, limited liability company or other entity is at the time owned by (directly or indirectly) or the management is otherwise controlled by (directly or indirectly) such Person (irrespective of whether, at the time, Equity Interests of any other class or classes of such corporation, partnership, limited liability company or other entity shall have or might have voting power by reason of the happening of any contingency).  Unless otherwise qualified, references to “Subsidiary” or “Subsidiaries” herein shall refer to those of the Company.

“Subsidiary Guarantor” means each Subsidiary that has executed and delivered a Subsidiary Guaranty.

“Subsidiary Guaranty” is defined in Section 2.2.



A-21



“Substitute Purchaser” is defined in Section 21.

“SVO” means the Securities Valuation Office of the NAIC or any successor to such Office.

“Synthetic Lease” means any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet financing product where such transaction is considered borrowed money indebtedness for tax purposes but is classified as an Operating Lease in accordance with GAAP.

“Tax” means any tax (whether income, documentary, sales, stamp, registration, issue, capital, property, excise or otherwise), duty, assessment, levy, impost, fee, compulsory loan, charge or withholding.

“Threshold Amount” means $35,000,000.

“Transaction Costs” means all transaction fees, charges, costs, expenses and other amounts related to the Transactions (including, without limitation, any financing fees, merger and acquisition fees, legal fees and expenses, due diligence fees or any other fees and expenses in connection therewith), in each case to the extent paid within six months of the closing of this Agreement.

“Transaction Documents” means this Agreement, the Notes, the Intercreditor Agreement, the Subsidiary Guaranty, the Security Documents, the Disclosure Letter and the other agreements, documents, certificates and instruments now or hereafter executed or delivered by the Companies or any Subsidiary or Affiliate in connection with this Agreement.

“Transaction Parties” means, collectively, the Company and the Subsidiary Guarantors.

“Transactions” means, collectively, (a) the repayment in full of all Indebtedness outstanding under the Existing Credit Agreement, (b) the execution and delivery of the Credit Agreement, (c) the issuance and sale of the Notes and (d) the payment of the fees, charges, costs, expenses and other amounts in connection with the foregoing.

“UCC” means the Uniform Commercial Code as in effect in the State of New York.

“USA PATRIOT Act” means United States Public Law 107-56, Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time, and the rules and regulations promulgated thereunder from time to time in effect.

“U.S. Economic Sanctions Laws” means those laws, executive orders, enabling legislation or regulations administered and enforced by the United States pursuant to which economic sanctions have been imposed on any Person, entity, organization, country or regime, including the Trading with the Enemy Act, the International Emergency Economic Powers Act, the Iran Sanctions Act, the Sudan Accountability and Divestment Act and any other OFAC Sanctions Program.



A-22



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

“Wholly-Owned Subsidiary” means, with respect to a Subsidiary, that all of the Equity Interests of such Subsidiary are, directly or indirectly, owned or controlled by the Company and/or one or more of its Wholly-Owned Subsidiaries (except for directors’ qualifying shares or other shares required by Applicable Law to be owned by a Person other than the Company and/or one or more of its Wholly-Owned Subsidiaries).

“Working Capital” means, for the Company and its Subsidiaries on a Consolidated basis and calculated in accordance with GAAP, as of any date of determination, the excess of (a) current assets (other than cash and cash equivalents and prepaid income taxes and the current portion of deferred income taxes) over (b) current liabilities, excluding, without duplication, (i) the current portion of any long-term Indebtedness, (ii) outstanding Revolving Credit Loans and Swingline Loans (each, under and as defined in the Credit Agreement), (iii) the current portion of current income taxes and (iv) the current portion of accrued Consolidated Interest Expense.



A-23



[F ORM OF S ERIES A N OTE]

THE OFFER AND SALE OF THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND THIS NOTE MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT IS IN EFFECT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.


C OPART, I NC.

4.07% S ENIOR N OTE, S ERIES A, D UE D ECEMBER 3, 2024

No. [_____]

[Date]

$[_______]

PPN 217204 A*7


FOR VALUE RECEIVED , the undersigned, Copart, Inc. (herein called the “Company” ), a corporation organized and existing under the laws of the State of Delaware, hereby promises to pay to [____________], or registered assigns, the principal sum of [_____________________] DOLLARS (or so much thereof as shall not have been prepaid) on December 3, 2024 (the “Maturity Date” ), with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of 4.07% per annum from the date hereof, payable quarterly, on the third day of March, June, September and December in each year, commencing with the March, June, September or December next succeeding the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, (x) on any overdue payment of interest and (y) during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount or Excess Leverage Fee, at a rate per annum from time to time equal to the greater of (i) the sum of (1) 6.07% per annum and (2) to the extent the Excess Leverage Fee is then applicable, the Excess Leverage Fee or (ii) 2.00% over the rate of interest publicly announced by Wells Fargo Bank, National Association from time to time in New York, New York as its “base” or “prime” rate, payable quarterly as aforesaid (or, at the option of the registered holder hereof, on demand).

Payments of principal of, interest on and any Make-Whole Amount or Excess Leverage Fee with respect to this Note are to be made in lawful money of the United States of America at the main office of Wells Fargo Bank, National Association, in New York, New York or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.

This Note is one of a series of Senior Notes (herein called the “Notes” ) issued pursuant to the Note Purchase Agreement, dated as of December 3, 2014 (as from time to time amended, restated, modified or otherwise supplemented, the “Note Purchase Agreement” ), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof.  Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the



S CHEDULE 1(a)
(to Note Purchase Agreement)



confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) made the representation set forth in Section 6.1 and Section 6.2 of the Note Purchase Agreement.  Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.

This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

This Note is subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.

This Note is guaranteed by certain Subsidiaries of the Company pursuant to the Subsidiary Guaranty and secured by, and entitled to the benefits of, the Security Documents.  Reference is made to the Subsidiary Guaranty and the Security Documents for a statement concerning the terms and conditions governing the guaranty and collateral security for the obligations of the Companies hereunder.

If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.

This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.


 

C OPART, I NC.

 

 

 

 

 

By

 

 

 

[Title]



1(a)-2



[F ORM OF S ERIES B N OTE]

THE OFFER AND SALE OF THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND THIS NOTE MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT IS IN EFFECT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.


C OPART, I NC.

4.19% S ENIOR N OTE, S ERIES B, D UE D ECEMBER 3, 2026

No. [_____]

[Date]

$[_______]

PPN 217204 A@5


FOR VALUE RECEIVED , the undersigned, Copart, Inc. (herein called the “Company” ), a corporation organized and existing under the laws of the State of Delaware, hereby promises to pay to [____________], or registered assigns, the principal sum of [_____________________] DOLLARS (or so much thereof as shall not have been prepaid) on December 3, 2026 (the “Maturity Date” ), with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of 4.19% per annum from the date hereof, payable quarterly, on the third day of March, June, September and December in each year, commencing with the March, June, September or December next succeeding the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, (x) on any overdue payment of interest and (y) during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount or Excess Leverage Fee, at a rate per annum from time to time equal to the greater of (i) the sum of (1) 6.19% per annum and (2) to the extent the Excess Leverage Fee is then applicable, the Excess Leverage Fee or (ii) 2.00% over the rate of interest publicly announced by Wells Fargo Bank, National Association from time to time in New York, New York as its “base” or “prime” rate, payable quarterly as aforesaid (or, at the option of the registered holder hereof, on demand).

Payments of principal of, interest on and any Make-Whole Amount or Excess Leverage Fee with respect to this Note are to be made in lawful money of the United States of America at the main office of Wells Fargo Bank, National Association, in New York, New York or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.

This Note is one of a series of Senior Notes (herein called the “Notes” ) issued pursuant to the Note Purchase Agreement, dated as of December 3, 2014 (as from time to time amended, restated, modified or otherwise supplemented, the “Note Purchase Agreement” ), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof.  Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the



S CHEDULE 1(b)
(to Note Purchase Agreement)



confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) made the representation set forth in Section 6.1 and Section 6.2 of the Note Purchase Agreement.  Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.

This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

This Note is subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.

This Note is guaranteed by certain Subsidiaries of the Company pursuant to the Subsidiary Guaranty and secured by, and entitled to the benefits of, the Security Documents.  Reference is made to the Subsidiary Guaranty and the Security Documents for a statement concerning the terms and conditions governing the guaranty and collateral security for the obligations of the Companies hereunder.

If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.

This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.


 

C OPART, I NC.

 

 

 

 

 

By

 

 

 

[Title]



1(b)-2



[F ORM OF S ERIES C N OTE]

THE OFFER AND SALE OF THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND THIS NOTE MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT IS IN EFFECT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.


C OPART, I NC.

4.25% S ENIOR N OTE, S ERIES C, D UE D ECEMBER 3, 2027

No. [_____]

[Date]

$[_______]

PPN 217204 A#3


FOR VALUE RECEIVED , the undersigned, Copart, Inc. (herein called the “Company” ), a corporation organized and existing under the laws of the State of Delaware, hereby promises to pay to [____________], or registered assigns, the principal sum of [_____________________] DOLLARS (or so much thereof as shall not have been prepaid) on December 3, 2027 (the “Maturity Date” ), with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of 4.25% per annum from the date hereof, payable quarterly, on the third day of March, June September and December in each year, commencing with the March, June September or December next succeeding the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, (x) on any overdue payment of interest and (y) during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount or Excess Leverage Fee, at a rate per annum from time to time equal to the greater of (i) the sum of (1) 6.25% per annum and (2) to the extent the Excess Leverage Fee is then applicable, the Excess Leverage Fee or (ii) 2.00% over the rate of interest publicly announced by Wells Fargo Bank, National Association from time to time in New York, New York as its “base” or “prime” rate, payable quarterly as aforesaid (or, at the option of the registered holder hereof, on demand).

Payments of principal of, interest on and any Make-Whole Amount or Excess Leverage Fee with respect to this Note are to be made in lawful money of the United States of America at the main office of Wells Fargo Bank, National Association, in New York, New York or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.

This Note is one of a series of Senior Notes (herein called the “Notes” ) issued pursuant to the Note Purchase Agreement, dated as of December 3, 2014 (as from time to time amended, restated, modified or otherwise supplemented, the “Note Purchase Agreement” ), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof.  Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the



S CHEDULE 1(c)
(to Note Purchase Agreement)



confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) made the representation set forth in Section 6.1 and Section 6.2 of the Note Purchase Agreement.  Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.

This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

This Note is subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.

This Note is guaranteed by certain Subsidiaries of the Company pursuant to the Subsidiary Guaranty and secured by, and entitled to the benefits of, the Security Documents.  Reference is made to the Subsidiary Guaranty and the Security Documents for a statement concerning the terms and conditions governing the guaranty and collateral security for the obligations of the Companies hereunder.

If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.

This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.


 

C OPART, I NC.

 

 

 

 

 

By

 

 

 

[Title]



1(c)-2



[F ORM OF S ERIES D N OTE]

THE OFFER AND SALE OF THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND THIS NOTE MAY NOT BE TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION STATEMENT IS IN EFFECT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS.


C OPART, I NC.

4.35% S ENIOR N OTE, S ERIES D, D UE D ECEMBER 3, 2029

No. [_____]

[Date]

$[_______]

PPN 217204 B*6


FOR VALUE RECEIVED , the undersigned, Copart, Inc. (herein called the “Company” ), a corporation organized and existing under the laws of the State of Delaware, hereby promises to pay to [____________], or registered assigns, the principal sum of [_____________________] DOLLARS (or so much thereof as shall not have been prepaid) on December 3, 2029 (the “Maturity Date” ), with interest (computed on the basis of a 360-day year of twelve 30-day months) (a) on the unpaid balance hereof at the rate of 4.35% per annum from the date hereof, payable quarterly, on the third day of March, June, September and December in each year, commencing with the March, June, September or December next succeeding the date hereof, and on the Maturity Date, until the principal hereof shall have become due and payable, and (b) to the extent permitted by law, (x) on any overdue payment of interest and (y) during the continuance of an Event of Default, on such unpaid balance and on any overdue payment of any Make-Whole Amount or Excess Leverage Fee, at a rate per annum from time to time equal to the greater of (i) the sum of (1) 6.35% per annum and (2) to the extent the Excess Leverage Fee is then applicable, the Excess Leverage Fee or (ii) 2.00% over the rate of interest publicly announced by Wells Fargo Bank, National Association from time to time in New York, New York as its “base” or “prime” rate, payable quarterly as aforesaid (or, at the option of the registered holder hereof, on demand).

Payments of principal of, interest on and any Make-Whole Amount or Excess Leverage Fee with respect to this Note are to be made in lawful money of the United States of America at the main office of Wells Fargo Bank, National Association, in New York, New York or at such other place as the Company shall have designated by written notice to the holder of this Note as provided in the Note Purchase Agreement referred to below.

This Note is one of a series of Senior Notes (herein called the “Notes” ) issued pursuant to the Note Purchase Agreement, dated as of December 3, 2014 (as from time to time amended, restated, modified or otherwise supplemented, the “Note Purchase Agreement” ), between the Company and the respective Purchasers named therein and is entitled to the benefits thereof.  Each holder of this Note will be deemed, by its acceptance hereof, to have (i) agreed to the



SCHEDULE 1(d)
(to Note Purchase Agreement)



confidentiality provisions set forth in Section 20 of the Note Purchase Agreement and (ii) made the representation set forth in Section 6.1 and Section 6.2 of the Note Purchase Agreement.  Unless otherwise indicated, capitalized terms used in this Note shall have the respective meanings ascribed to such terms in the Note Purchase Agreement.

This Note is a registered Note and, as provided in the Note Purchase Agreement, upon surrender of this Note for registration of transfer accompanied by a written instrument of transfer duly executed, by the registered holder hereof or such holder’s attorney duly authorized in writing, a new Note for a like principal amount will be issued to, and registered in the name of, the transferee.  Prior to due presentment for registration of transfer, the Company may treat the person in whose name this Note is registered as the owner hereof for the purpose of receiving payment and for all other purposes, and the Company will not be affected by any notice to the contrary.

This Note is subject to optional prepayment, in whole or from time to time in part, at the times and on the terms specified in the Note Purchase Agreement, but not otherwise.

This Note is guaranteed by certain Subsidiaries of the Company pursuant to the Subsidiary Guaranty and secured by, and entitled to the benefits of, the Security Documents.  Reference is made to the Subsidiary Guaranty and the Security Documents for a statement concerning the terms and conditions governing the guaranty and collateral security for the obligations of the Companies hereunder.

If an Event of Default occurs and is continuing, the principal of this Note may be declared or otherwise become due and payable in the manner, at the price (including any applicable Make-Whole Amount) and with the effect provided in the Note Purchase Agreement.

This Note shall be construed and enforced in accordance with, and the rights of the Company and the holder of this Note shall be governed by, the law of the State of New York excluding choice-of-law principles of the law of such State that would permit the application of the laws of a jurisdiction other than such State.


 

C OPART, I NC.

 

 

 

 

 

By

 

 

 

[Title]



1(d)-2



F ORM OF O PINION OF S PECIAL C OUNSEL
TO THE C OMPANY

Matters To Be Covered in
Opinion of Special Counsel to the Company

1.

Each of the Company and its Subsidiaries being duly incorporated, validly existing and in good standing and having requisite corporate power and authority to issue and sell the Notes and to execute, deliver and perform the Transaction Documents.

2.

Each of the Company and its Subsidiaries being duly qualified and in good standing as a foreign corporation in appropriate jurisdictions.

3.

Due authorization and execution of the Transaction Documents and such Transaction Documents being legal, valid, binding and enforceable.

4.

No conflicts with charter documents, laws or other agreements.

5.

All consents required to issue and sell the Notes and to execute, deliver and perform the Transaction Documents having been obtained.

6.

The Notes not requiring registration under the Securities Act of 1933, as amended; no need to qualify an indenture under the Trust Indenture Act of 1939, as amended.

7.

No violation of Regulations T, U or X of the Federal Reserve Board.

8.

Company not an “investment company”, or a company “controlled” by an “investment company”, under the Investment Company Act of 1940, as amended.

9.

Security Documents create a valid and enforceable security interest securing the Notes.  

10.

All actions required to perfect the security interest created by the Security Documents in favor of the Collateral Agent, for the benefit of the holders of Notes, have been taken.  




S CHEDULE 4.8(a)
(to Note Purchase Agreement)



F ORM OF O PINION OF S PECIAL C ONNECTICUT C OUNSEL
TO THE C OMPANY

Matters To Be Covered in
Opinion of Special Connecticut Counsel to the Company

1.

Each Subsidiary organized under the laws of the state of Connecticut (a “CT Entity” ) being duly incorporated, validly existing and in good standing and having requisite corporate power and authority to execute, deliver and perform the Transaction Documents.

2.

Due authorization and execution of the Transaction Documents by each CT Entity.

3.

No conflicts with charter documents, laws or other agreements.

4.

All state of Connecticut consents required to execute, deliver and perform the Transaction Documents having been obtained.

5.

All actions required to perfect the security interest created by the Security Documents granted by the CT Entities in favor of the Collateral Agent, for the benefit of the holders of Notes, have been taken.  




S CHEDULE 4.8(b)
(to Note Purchase Agreement)



F ORM OF O PINION OF S PECIAL C OUNSEL
TO THE P URCHASERS


The closing opinion of Schiff Hardin LLP, special counsel to the Purchasers, called for by Section 4.8(c) of the Agreement, shall be dated the Closing Date and addressed to the Purchasers, shall be satisfactory in form and substance to the Purchasers and shall be to the effect that:

1.

The Company is a corporation in good standing under the laws of the State of Delaware.

2.

The Agreement and the Notes being delivered on the date hereof constitute the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms.

3.

The issuance, sale and delivery of the Notes being delivered on the date hereof under the circumstances contemplated by the Agreement do not, under existing law, require the registration of such Notes under the Securities Act or the qualification of an indenture under the Trust Indenture Act of 1939, as amended.

The opinion of Schiff Hardin LLP shall also state that the opinions of (a) Wilson Sonsini Goodrich & Rosati, special counsel for the Company, and (b) Shipman, Shaiken & Schwefel, LLC, special Connecticut counsel for the Company, are satisfactory in scope and form to Schiff Hardin LLP and that, in its opinion, the Purchasers are justified in relying thereon.

In rendering the opinion set forth in paragraph 1 above, Schiff Hardin LLP may rely solely upon an examination of the good standing of the Company from the Secretary of State of the State of Delaware.  The opinion of Schiff Hardin LLP is limited to the laws of the State of New York and the federal laws of the United States.

With respect to matters of fact upon which such opinion is based, Schiff Hardin LLP may rely on appropriate certificates of public officials and officers of the Company and upon representations of the Company and the Purchasers delivered in connection with the issuance and sale of the Notes.





S CHEDULE 4.8(c)
(to Note Purchase Agreement)



C OPART, I NC.
14185 Dallas Parkway
Dallas, TX 75254


Information Relating to Purchasers

 

N AME AND A DDRESS OF P URCHASER

P RINCIPAL A MOUNT OF
N OTES TO BE P URCHASED

 

[ N AME OF P URCHASER ]

$

(1)

All payments by wire transfer of immediately available funds to:


with sufficient information to identify the source and application of such funds.

 

(2)

All notices of payments and written confirmations of such wire transfers:

 

(3)

E-mail address for Electronic Delivery:


 

(4)

All other communications: